REPORT
ON
MORTMAIN, CHARITABLE USES
AND RELIGIOUS INSTITUTIONS
ONTARIO LAW REFORM COMMISSION
vmamr
Ontario
Ministry of the 1976
Attorney
General
REPORT
ON
MORTMAIN, CHARITABLE USES
AND RELIGIOUS INSTITUTIONS
ONTARIO LAW REFORM COMMISSION
Ontario
Ministry of the 1976
Attorney
General
The Ontario Law Reform Commission was established by section 1
of The Ontario Law Reform Commission Act, J 964, for the purpose of pro-
moting the reform of the law and legal institutions. The Commissioners are:
H. Allan Leal, Q.C., LL.M., LL.D., Chairman
Honourable James C. McRuer, O.C., LL.D., D.C.L.
Honourable Richard A. Bell, P.C., Q.C.
W. Gibson Gray, Q.C.
William R. Poole, O-C.
Lyle S. Fairbairn, LL.B., is Counsel to the Commission. The Secre-
tary of the Commission is Miss A. F. Chute, and its offices are located on
the Sixteenth Floor at 18 King Street East, Toronto, Ontario, Canada.
TABLE OF CONTENTS
Page
Letter of Transmittal v
Chapter 1 Introduction
1 . The Need for Reform 1
2. The Form and Scope of the Report 1
Chapter 2 Historical Development of Mortmain and Charitable Uses
Legislation: Past Utility
1 . Introduction 3
2. Mortmain 3
3. Charitable Uses 4
4. Consolidation of Mortmain and Charitable Uses Legislation in
England 7
5. Repeal of Mortmain and Charitable Uses Legislation in England . 8
6. Adoption of Mortmain in Ontario 9
7. Mortmain Legislation in Other Provinces 11
Chapter 3 Policy Considerations With Respect to The Mortmain and
Charitable Uses Act
1 . Introduction 13
2. Foreign Ownership of Land 14
3. The Constitutional Issue 17
4. Investment in Land by Charitable Organizations 19
5. Special Exemptions 20
6. Regulation and Monitoring of Charities 21
7. Future Utility of The Mortmain and Charitable Uses Act 21
8. Consequential Amendments and Repeals 22
Recommendations 23
Chapter 4 Operation and Scope of The Mortmain and Charitable
Uses Act
1 . Definitions 25
2. Mortmain 27
(a) Generally 27
(b) Licences in Mortmain 30
3. Charitable Uses 31
(a) Assurances Inter Vivos 31
(b) Land Devised by Will 32
(c) The Sanction: Divestment 32
(d) Gifts to Public Bodies 35
4. Time Period During which Sale is Required 37
5. Exemptions 37
6. The Effect of Section 15 39
7. Breach of Charitable Trust 40
8. Conclusions 40
Recommendations 41
[mi
IV
Chapter 5 History of The Religious Institutions Act
1 . History in Ontario 45
2. The Operation of the Act 48
3. Legislation in Other Provinces 48
Chapter 6 Continuing Utility of The Religious Institutions Act
1 . Introduction 49
2. Extension to Other Religious Societies 50
3. Method of Acquiring Land 52
4. Purposes for which Land may be Held 52
5. The Power to Lease 52
6. Power to Sell 53
7. Joint Trustees 53
8. Applications to Court 54
9. Special Cases 55
10. Corporate Status for Trustees 55
1 1 . Conclusion 56
Chapter 7 Summary of Recommendations 57
Conclusion 61
Appendix A 63
Appendix B 71
Appendix C 73
Ontario
ONTARIO LAW REFORM COMMISSION
Sixteenth Floor,
18 King Street East,
Toronto, Ontario.
M5C 1C5
To The Honourable R. Roy McMurtry, Q.C.,
Attorney General for Ontario.
Dear Mr. Attorney:
Your predecessor, the Honourable Robert Welch, Q.C., wrote to the
Commission on May 14, 1974 requesting it to undertake an examination, study
and enquiry into the past, present and future utility and effectiveness of The
Mortmain and Charitable Uses Act and The Religious Institutions Act. After this
study and consideration, we were asked to recommend such changes in the law
relating to these Acts as in the opinion of the Commission are necessary and/or
desirable.
Following this reference a research programme was drawn up, with
Professor A. H. Oosterhoff of the Faculty of Law of the University of Western
Ontario appointed as Research Director. Public notices were placed in news-
papers across the Province of Ontario and in the Ontario Reports inviting
members of the public, corporations, religious institutions, organizations or
societies, and members of the legal profession, to make submissions concerning
the study. As a result, submissions were received from or on behalf of some
thirty-five religious societies, four charities, two other interested organizations,
twenty-two members of the judiciary and from six members of the legal profes-
sion.
Consultations also took place with the Public Trustee, with the Executive
Director of the Companies Division of the Ministry of Consumer and Commer-
cial Relations, and with Mr. C. M. Powell, Q.C., the Assistant Deputy Attorney
General.
After careful consideration of these submissions, and after extensive
research, the Commission now submits its report.
[v]
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in 2011 with funding from
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http://www.archive.org/details/reportonmortmainOOonta
CHAPTER 1
INTRODUCTION
It is vital to the proper functioning of modern society that its members
should have a basic familiarity with the laws by which society is governed and
which regulate their affairs. In order that members of the public may learn to
know these laws, it is necessary that they be written in a form that is clear and
readily understandable and, in the case of older laws that are still of use today,
that they be recast in modern language and form. This is particularly so in the
case of laws relating to property and civil rights, laws which affect every member
of society most directly. Unfortunately, many of our laws in these areas date
back many hundreds of years, they have been amended from time to time
without much thought to the overall policy, and their original meaning and
purpose are often obscured by time or, if they are known, they are no longer
applicable in today's society.
1 . The Need for Reform
Comprehensive reform of the law of mortmain, charities, charitable uses,
and related areas such as the law relating to the holding of property by religious
institutions, is urgently needed. The research for this Reference has demon-
strated that many of the laws in these areas have accumulated over the centuries,
some of them dating back to feudal times and beyond, and have contributed to
what was once described, with reference to land law generally, as "a 'rubbish-
heap . . . which no one (except professors in law schools) understands' — and
rather with the implication that even the professors do not thoroughly under-
stand them or all understand them the same way".1 In many respects, these laws
represent arid learning of use in an earlier society in another country, trans-
planted here as undernourished, unwanted and atrophied plants. In other re-
spects, they represent a patchwork quilt of legislative reaction to social evils or
perceived evils, both in feudal and modern times. Some of these laws are still
relevant today. Others are deadwood that should be pruned to make room for
new developments.
2 . The Form and Scope of the Report
The Reference from the Attorney General directed the Commission
To examine, study and enquire into the past, present and future utility
and effectiveness of The Mortmain and Charitable Uses Act2 and The
Religious Institutions Act2 and, after study and consideration, to recom-
mend such changes in the law relating to these Acts as in the opinion of
the Ontario Law Reform Commission are necessary and/or desirable.
In compliance with these terms of reference, this Report examines the
historical background of the two statutes and their respective functions in the
past. As regards The Mortmain and Charitable Uses Act both its history in
England and in Ontario is traced, reference being made to other jurisdictions
where appropriate. With respect to The Religious Institutions Act, its evolution
in Ontario has received prime consideration, but references are made to similar
enactments in the other provinces of Canada. The Report discusses the operation
'Miller v. Tipling (1918), 43 O.L.R. 88, 97, 43 D.L.R. 469, 477, per Riddell, J.
2R.S.O. 1970, c. 280, as am. by S.O. 1972, c. 85.
3R.S.O. 1970, c. 411.
[1]
and effect of both statutes and considers whether and to what extent their
former utility is relevant to today's society. Finally, the Report attempts to
assess the future utility of the legislation and makes specific proposals for reform
including, in the case of The Religious Institutions Act, a draft Bill to replace
the existing legislation.
In our treatment of the foregoing, we have dealt with the two statutes
separately. We did so for two reasons: in the first place, as a matter of conve-
nience and for ease of reference; secondly, because the two enactments, while
there are overlapping areas, concern different, at least distinct, subject matters.
The Mortmain and Charitable Uses Act itself consists of two separate parts
which, however, are closely related. The first part concerns the law of mortmain;
the second part contains provisions respecting charitable uses and objects or,
more generally, charities. The Act further contains certain exemptions applicable
to both parts. The provisions respecting mortmain are directed solely to corpora-
tions of all types, aggregate and sole, ecclesiastical and secular, business corpora-
tions and those that do not have gain for their objects. Basically, these provisions
prohibit the holding of land by corporations in perpetuity unless they are au-
thorized to do so by statute or licence. Most corporations are authorized to hold
land under a statute. To the extent that they are not so authorized, they may
obtain a licence in mortmain under the provisions of the first part of the Act.
The charitable uses provisions of the Act prohibit the holding of land for
any charitable purpose, including religious purposes. Land acquired for such
purposes by a charity must be sold within two years, failing which it will vest in
the Public Trustee who is obliged to sell the land and to pay the proceeds to the
charity. There is, however, an opportunity to apply to the Court to permit
retention of the land if it is required for the actual use and occupation of the
charity and not as an investment.
The Religious Institutions Act was originally designed to permit churches
and religious societies to acquire and to hold land for places of public worship
and related uses in a quasi-corporate capacity. At the same time, religious socie-
ties that fall under that Act avoid many of the strictures of The Mortmain and
Charitable Uses Act.
The terms of the Reference limited our research to the two enactments.
However, when it is apparent that reform in related areas of the law is necessary
or would be desirable we have indicated the nature of the studies which might be
undertaken.
The scope of the Report is limited in other respects as well. In some
measure a discussion of the present and future utility of the legislation impinges
upon important questions of policy currently under review by the Government.
In particular, we mention the question of foreign ownership of land, in this case
by charities. Whether the Province should seek to monitor or control foreign
ownership of land in Ontario, or restrict investment in land by charities, are not
appropriate subjects for determination by this Commission. These matters are
uniquely political in character, being concerned exclusively with the direction of
social policy. We have dealt with these matters only to the extent that was
necessary in considering whether to recommend the repeal or amendment of The
Mortmain and Charitable Uses Act in whole or in part.
CHAPTER 2
HISTORICAL DEVELOPMENT OF
MORTMAIN AND CHARITABLE USES
LEGISLATION: PAST UTILITY
1 . Introduction
In this chapter we propose to give briefly the historical background to the
legislation respecting mortmain and charitable uses, to trace its origin and con-
sider its function in history.
The Mortmain and Charitable Uses Act1 is an unhappy blend of two
historically different types of legislation whose functions, while similar in origin,
are substantially different in practice. As noted above,2 these are the provisions
respecting mortmain which apply solely to corporate entities and the legislation
governing charitable uses which, save for specific exceptions, affects all charities
whether they are incorporated or not.
Both types of legislation originated in England and we will, therefore, first
consider their development there.3
2. Mortmain
The origin of mortmain legislation may be traced back beyond Norman
times, but the forerunner of the present legislation4 dates back to Magna Carta
and several subsequent statutes. The early legislation was aimed at the increasing
acquisitions of land by the religious houses. Land held by such houses was free
from the normal temporal dues owed to the king and the lords in the feudal
system of landholding. As the power of the religious houses and their land
ownership grew the concept of mortmain emerged. The word "mortmain" de-
rives from the Norman French for "dead hand". It thus connotes the state into
which lands conveyed to corporations passed, for the corporations lasted for-
ever; and the religious houses, which paid no "taxes", were regarded as corpora-
tions.
In addition, there appears to have been a real fear that the church was
taking advantage of the courts for its own aggrandizement, that it was becoming
too powerful and caused the disinheritance of heirs from their rightful estates.
All these factors contributed to the passing of the first mortmain legisla-
tion in the second Magna Carta5 which was directed solely against alienation to
religious houses. This enactment was followed by several subsequent statutes
designed to curb evasions of the legislation and to provide a procedure whereby
land alienated into mortmain would become forfeit and for obtaining a licence
1 R.S.O. 1970, c. 280, as am. by S.O. 1972, c. 85.
2 Chapter 1, p. 2.
3 For much of the early history of mortmain and charitable uses reference was and
may usefully be had to the following works: Digby, An Introduction to the History
of the Law of Real Property, ch. 1 ; Simpson, An Introduction to the History of Land
Law, ch. 3; Shelford, Law of Mortmain; Tudor, The Law of Charities and Mortmain,
(4th ed., 1906), pp. 1-19, 427-506; Pollock and Maitland, The History of English
Law: Before the Time of Edward I, (2nd ed., 1968), vol. 1; Holdsworth, A History of
English Law, vol. 2, p. 68 ff.; Jones, History of the Law of Charity , 1532-1827 and
Keeton and Sheridan, The Modern Law of Charities, (2nd ed., 1971), ch. 1.
4 The first part of The Mortmain and Charitable Uses Act, supra, footnote 1.
52Hen. 3, c. 43 (1217).
[3]
to hold land in mortmain.6 These various pieces of legislation were collectively
called the Statutes of Mortmain.
Finally, in 1391 , another statute was passed7 which prohibited the holding
of land by individuals for the use of or in trust for religious orders, and extended
the Statutes of Mortmain to secular corporations for the first time. This exten-
sion was designed in particular to check the rising power of the guilds and the
new trading companies, and municipal corporations.8
Failure to comply with the Statutes of Mortmain rendered the title to land
not void, but voidable only. It was recoverable by entry or action by the lord of
whom it was held or, failing him, by the king.9
After the Reformation and the dissolution of the monasteries by Henry
VIII a more lenient attitude can be discerned towards the holding of land by
charities. This new attitude led to legislation solely respecting charitable uses.
3. Charitable Uses
The phrase "charitable uses" is an old term which refers to uses, purposes
or objects which are regarded in law as charitable. The purposes or objects may
be pursued by the charity itself if it is incorporated, or by trustees appointed to
do so. When the legislation speaks of land being assured to or for the benefit of a
charitable use, therefore, the reference is to a deed or will by which the grantor
or testator has conveyed or devised land for charitable purposes.
The early history of charitable uses legislation, as indicated, was positive
and enabling, rather than restrictive. This was evidenced, for example, in the case
of the Church of England by the creation of a corporation known as Queen
Anne's Bounty. 10 This corporation was formed to make better provision for the
maintenance of the clergy and included authority to transfer land by deed or
will to the corporation, the Statutes of Mortmain notwithstanding.11 The main
thrust of legislative activity in this area was, however, directed towards secular
charities, primarily the relief of poverty and the advancement of education, by
encouraging private philanthropy in these areas.12
Of major significance was the Statute of Charitable Uses13 which is the
origin of the modern law of charities in England and of the common law jurisdic-
tions which derive their laws from England. The Preamble to this statute listed a
variety of purposes which were charitable and which included the following:14
6 The power to issue licences in mortmain was eventually vested in the Crown by 7 & 8
Will. 3, c. 37 (1696).
7 15 Ric. 2, c. 5(1391).
^Minutes of the evidence given before the Select Committee appointed to inquire into
the operation of the Laws of Mortmain, and the restrictions which limit the power of
making gifts and bequests for Charitable and Religious Uses (London, 1844), p. 40.
Hereafter referred to as "Minutes of the Mortmain Committee" and "Report of the
Mortmain Committee".
9Bristowe, A Treatise on the Mortmain and Charitable Uses Act, 1891, p. 7. This was
provided for in the Statute De Viris Religiosis, 7 Edw. 1, Stat. 2, c. 13 (1279).
10 3 Anne, c. 11 (1703).
11 Ibid., s. 4.
12Keeton and Sheridan, The Modern Law of Charities, pp. 4, 5.
1343 Eliz. l,c. 4(1601).
14 The list is given in modern orthography and, where applicable, translation or para-
phrase.
The relief of aged, impotent and poor people; the maintenance of the sick,
and maimed soldiers and mariners; schools of learning, free schools and
scholars in universities; the repair of bridges, ports, havens, causeways,
churches, seabanks and highways; the education and preferment of or-
phans; the relief, stock or maintenance of houses of correction; the mar-
riage of poor maids; the help of young tradesmen and persons in impover-
ished circumstances; the relief or redemption of prisoners or captives; and
the aid to poor inhabitants concerning the payment of taxes.15
Generally speaking the law today regards a purpose as charitable if it falls
within the terms or the spirit or intendment of the Preamble or arises by analogy
therefrom.
It might be noted that religious purposes were not mentioned in the Pre-
amble. The reason is readily apparent. At that time and until the growth of
religious toleration, the only legal object of religious charity was the state
church, the Church of England, and it was separately regulated by statute.
A reversal of policy occurred in the early eighteenth century with the
enactment of An Act to Restrain the Disposition of Lands, whereby the same
become Unalienable.16 The Act is generally referred to as the Mortmain Act,
1736, although inaccurately so since in substance it differs from the Statutes of
Mortmain which were directed only at corporations. The Act of 1736 was direct-
ed at charities, incorporated or unincorporated, and restricted the transfer of
land to charitable uses. Nevertheless, the policy of both types of statute is the
same in that they seek to prevent the tying up of land in perpetuity.17
The Act is the origin of section 6 of the present Ontario Act. It prohibited
the transfer of land, or any interest therein, or any sum of money to be laid out
in the purchase of land, to or for the benefit of any charitable uses unless it
complied with four conditions. These were:
(1) the transfer had to be made by deed executed in the presence of two
or more witnesses at least twelve months before the death of the
transferor and, in the case of stocks, also be transferred in the books
at least six months before that date;
(2) the deed had to be enrolled in the High Court of Chancery within six
months of its execution;
(3) the transfer should take effect in possession forthwith; and
(4) the transfer should be without any power of revocation or reserva-
tion for the benefit of the grantor. The first condition did not apply
where the transfer was in pursuance of a bona fide purchase for full
and valuable consideration actually paid before the execution of the
transfer.
The Act, because of the nature of the conditions imposed, effectively
prohibited dispositions of land to charitable uses by will since a disposition by
will could not possibly comply with the conditions. Inter vivos transactions
would also be prohibited, of course, if the conditions were not met. Further-
15 The Preamble was incorporated as a definition of valid charitable uses in England in
the Mortmain and Charitable Uses Act, 1888, 51 & 52 Vict., c. 42, s. 13(2), and in
Ontario in The Mortmain and Charitable Uses Act, S.O. 1902, c. 2, s. 6.
'6 9 Geo. 2, c. 36(1736).
"Luckraft v. Pridham (1877), 6 Ch. D. 205, 214 (C.A.), per Jessel, M.R.
more, the Act rendered such dispositions absolutely void, not merely voidable as
in the case of the old Statutes of Mortmain. In addition, a further effect of the
Act was that even though a corporation with charitable objects was exempt by
statute from the obligation to obtain a licence in mortmain, or which had
obtained such a licence, it was not exempt from the provisions of the Act of
1736.18 That is still the case under the current Ontario legislation.19
The policy of the Mortmain Act as stated in its Preamble was to prohibit
improvident dispositions of land made by languishing or dying persons and by
others to take effect after their deaths, thereby disinheriting the heirs of the
donors. An additional purpose was expressed by Lord Hardwicke, L.C., to be to
prevent the taking of land out of commerce20 which is what happened when it
was conveyed or devised to perpetual charitable trusts. The latter may be a more
cogent reason than the first since, if the disinheritance of heirs had been thought
that important, the Act would have applied to personalty as well.21 Similarly, if
it was thought important to prevent the evil of testators being imposed upon on
their deathbeds to give their property to charity, the Act did not achieve that
purpose, since it applied to all wills whenever made, but did not prohibit testa-
mentary dispositions of personalty (except to the extent that they directed
personalty to be laid out in the purchase of land).
There is evidence to suggest that the Act of 1736 was passed in reaction to
several recent large and, what were undoubtedly thought to be, foolish, charita-
ble devises which left the heirs impoverished.22 Indeed, these are adverted to in
the Preamble.
It has also been suggested23 that the real motive for the enactment was a
temporary sentiment of hostility toward the church. This is evident from the
debates in which constant reference is made to religious charities, particularly
Queen Anne's Bounty created only a few years before. The memory of the
powerful ecclesiastical corporations which had controlled nearly one-fifth of the
land in the kingdom at the time of the dissolution of the monasteries despite the
Statutes of Mortmain, must have troubled the legislators, particularly having
regard to the fact that only half a century earlier King James II had sought to
restore papal influence in England.24 It may thus well have been a fear, in view
of corporations such as Queen Anne's Bounty, that the Church of England had
set out to acquire great landed estates, thereby again to disturb the balance of
power in the state, that actuated Parliament to impose such a draconian measure
as the Mortmain Act.
Thus it is highly probable that the Act of 1736 was in large measure the
product of very specific events which caused fears — justified or unjustified — in
the minds of the legislators, rather than the product of a general policy seeking
l*Ibid.
19 See Re Hagerman (1918), 13 O.W.N. 406. But see chapter 4, at footnote 79 infra.
20 Attorney General v. Day (1748), 1 Ves. Sen. 217, 223, 27 E.R. 992, 995.
21 4 Scott, Trusts, 3rd, p. 2820, para. 362.3.
22Report of the Mortmain Committee, supra, footnote 8, p. iv; Jones, op. cit. footnote
3, p. 109. Jones cites Thomas Guy's magnificent endowment of the hospital bearing
his name and John Michel's devise of a large estate to The Queen's College, Oxford,
as examples.
"Bristowe, supra, footnote 9, at pp. 9 ff.
24 Ibid.
to impose further restraints on alienation of land based on a rational concern
that such alienation was inappropriate at the time.
4. Consolidation of Mortmain and Charitable Uses Legislation in England
In 1888 Parliament enacted the Mortmain and Charitable Uses Act,
1888.25 This Act made no basic changes in the law but was essentially a consoli-
dation of the old Statutes of Mortmain, which were brought together in Part I,
and of the Act of 1736, contained in Part II, together with intervening amend-
ments.
Part I of the Act thus dealt solely with corporations and prevented aliena-
tion to corporations in mortmain except under licence from the Crown or under
the authority of a statute, upon pain of forfeiture. It was originally thought that
as in the case of the early Statutes, a conveyance affected by the Act would be
voidable, not void, requiring the Crown to make an entry to recover the land if
the Act was not complied with.26 However, the Act was subsequently inter-
preted as rendering such a conveyance void ab initio.21
Part II of the Act was concerned with assurances of land to or for the
benefit of charitable uses. Its main provision, contained in section 4, is essen-
tially the same as section 6 in the present Ontario Act and is the origin of the
latter. The Act, in sections 6 and 7, contained a number of specific exemptions
similar to those contained in sections 8 and 9 of the Ontario Act. Subject to
certain restrictions as to enrolment, date of making the gift and quantum, these
included gifts by deed or will for a public park, a schoolhouse for an elementary
school, and a public museum, assurances in favour of the established universities
and colleges and assurances by deed to societies associated together for religious
purposes or for the promotion of education, art, literature, science, or like
purposes.
Three years later a further Act was passed, The Mortmain and Charitable
Uses Act, 1891 ,28 which amended the Act of 1888 very significantly by provid-
ing for disposition of land for charitable uses by will, thus removing the main
objection to the Acts of 1736 and 1888. Land so devised by will, however, had
to be sold within one year of the death of the testator unless a judge of the High
Court or the Charity Commissioners, if satisfied that the land was required for
the actual occupation for the purposes of the charity and not as an investment,
sanctioned the retention of such land. The effect of the Act thus was to permit
retention of such land by charities with the Court's consent. If the land was not
sold within the year, it vested forthwith in the official trustee of charity lands
and the Charity Commissioners were then required to sell it and pay the pro-
ceeds to the charity.
The purpose of the 1891 Act was stated by Lord Halsbury to be an
attempt by Parliament to accommodate two diverse but deeply-rooted principles
of the common law, namely, freedom of testation and free alienability of land.29
^Mortmain and Charitable Uses Act, 1888, 51 & 52 Vict., c. 42. Hereafter referred
to as the "English Act of 1888".
26 Tudor, op. cit., footnote 3, p. 428.
"Morelle Ltd. v. Wakeling, [1955] 2 Q.B. 379; Attorney General v. Parsons, [1955]
Ch. 664 (C.A.), revd on appeal, [1956] A.C. 421 (H.L.)
28 54 & 55 Vict., c. 73. Hereafter referred to as the "English Act of 1891".
29 In re Hume, Forbes v. Hume, [1895] 1 Ch. 422, 433.
8
The former had been restricted since 1736, the latter was still honoured by
requiring sale of the land within one year. It is apparent from the following
extracts from the Debates that the mistrust of corporations and charities with
their tendency to accumulate large landholdings was still very real in 1891 :
... so far as the Act is directed to preventing the accumulation of land in
great quantities in the hands of corporations, I do not propose to meddle
with the object of the Act, because that is an object which, I think many
would desire to preserve.30
and
. . . the general principle on which the law has gone, of preventing charities
which have money left to them investing it in land seems to be a very
sound one.31
5. Repeal of Mortmain and Charitable Uses Legislation in England
The period following the enactment of the Act of 1891 is characterized by
a series of piecemeal exemptions from the 1888 and 1891 statutes. Partly for
that reason, a Parliamentary committee under the chairmanship of the Rt. Hon.
Lord Nathan, the Committee on the Law and Practice Relating to Charitable
Trusts,32 was appointed in 1950 "to consider and report on the changes in the
law and practice (except as regards taxation) relating to charitable trusts in
England and Wales which would be necessary to enable the maximum benefit to
the community to be derived from them".33 After reviewing the purpose of all
the legislation concerning mortmain and charitable uses and the many exemp-
tions that had been granted the Committee concluded and recommended:
The . . . two sets of restrictions, mortmain and charitable uses, have a long
history behind them and now apply in a highly illogical manner, only to
trusts of certain purposes, many trusts having from time to time been
exempted from them. They are in any case, an anachronism in the condi-
tions of the twentieth century and we recommend their repeal . . .^
The Committee's views on the one-year sale requirement bear repetition.
They said:
As a matter of history, the [sale] requirement is presumably founded on
the same conception as that of mortmain, that is, the danger to public
welfare of land being locked up in the hands of religious and other charita-
ble bodies. We regard this conception as an anachronism, more particularly
in view of the fact that there is hardly any purpose for which the state or a
local or public authority cannot now purchase land by compulsion.
Accordingly we recommend that the requirement, that land assured to
charitable uses by will must be sold, should be repealed.35
30 Lord Herschell, 354 Pari. Deb. ser. 3, 715 (1891).
31 Marquis of Salisbury, ibid., p. 722.
32 Hereafter referred to as the "Nathan Committee".
33 Nathan Committee Report, { 1952); Cmd. 8710, p. 1, para. 1.
™Ibid., p. 65, para. 276.
^Ibid., para. 274.
Parliament, acting on the recommendations of the Nathan Committee
enacted the Charities Act, I960,26 which included a total repeal of the existing
mortmain and charitable uses legislation.37
6. Adoption of Mortmain in Ontario
The English law of mortmain and charitable uses may be said to have been
introduced into this province "by a side-wind". It was generally recognized that
this legislation was strictly the product of local events and concerns peculiar to
England and was thus inapplicable to the colonies. Thus in Attorney General v.
Stewart?* in which the Act of 1736 was held not to apply to the island of
Grenada in the West Indies, Sir William Grant, M.R., observed,
I conceive that the object of the Statute of Mortmain was wholly political
— that it grew out of local circumstances, and was meant to have merely a
local operation. It was passed to prevent what was deemed a public mis-
chief, and not to regulate as between ancestor and heir, the power of
devising, or to prescribe, as between grantor and grantee, the forms of
alienation.39
Despite this, however, the English law was held to apply to Ontario in
1846 in Doe d. Anderson v. Todd.40 The basis for this decision was that the
Province had recently passed two pieces of legislation, The Religious Societies
Amendment Act41 and The Church Temporalities Act42 which made provision
for certain named religious societies and for the Church of England, respectively,
to hold land for their purposes, "anything in the Statutes commonly called the
Statutes of Mortmain, to the contrary notwithstanding".43 The Court concluded
that the Legislature was the best arbiter of what is the law of the Province and it
appeared that it thought that the Statutes of Mortmain were indeed part of our
law. The Anderson decision has been severely criticized, but it was confirmed in
subsequent cases.44
On the other hand, the Statutes of Mortmain were held not to be law in
most of the other provinces of Canada on the basis of Attorney General v.
Stewart45
While there was some earlier Ontario legislation dealing with mortmain and
charitable uses, principally affecting religious institutions, the first enactment
relevant to this part of our Report is The Mortmain and Charitable Uses Act,
36 8 & 9Eliz. 2, c. 58.
^Ibid., ss. 38(1), 48(2), and Sched. VII, Part II.
38(1817), 2 Mer. 143, 35 E.R. 895.
39 Ibid., (1817), 2 Mer. 143, 161, 35 E.R. 895, 900.
40(1846), 2U.C.Q.B. 82.
41 S.C. 1841, c. 73
42S.C. 1841, c. 74
43The Religious Societies Amendment Act, S.C. 1841, c. 73, s. 2. The Church Tempor-
alities Act, S.C. 1841, c. 74, contained a similar provision in s. 16.
44 Corporation of Whitby v. Liscombe (1876), 23 Gr. \\Macdonell v. Purcell (1894), 23
S.C.R. 101.
45 Supra, footnote 38. See e.g. for The Northwest Territories and Saskatchewan, Re
Miller Estate, [1918] 1 W.W.R. 929; for Manitoba, Re Fenton Estate (1920), 53
D.L.R. 82, [1920] 2 W.W.R. 367; for British Columbia, Re Pearse Estate (1903), 10
B.C.R. 280; and for New Brunswick, Re Ray v. Annual Conference (1881), 6 S.C.R.
308.
10
1892 .46 This Act was based almost entirely on the English Act of 1891 and its
effect was the same; it permitted gifts of land by will for charitable purposes.
The major difference between the English and Ontario Acts was that the latter
made provision for sale within two years instead of one. Essentially the provi-
sions of the Act of 1892 are now contained in sections 1(1) (c), 10, 1 1 and 12 of
the present Act save for minor changes in wording and procedure.
The Act of 1892 was supplemented by The Mortmain and Charitable Uses
Act, 1902.41 This Act in turn was based, again virtually exclusively, on the
English Act of 1888. Thus at the beginning of the twentieth century the Ontario
legislation was virtually identical with the English legislation as regards assur-
ances to corporations and assurances, both inter vivos and by will, to charitable
uses. Minor differences existed to take account of local conditions.
There is little or no information available why these two statutes were
enacted in Ontario at that time. In part, it may be assumed that they resulted
from a fairly common legislative approach then current, to import into Ontario,
without questioning the ramifications of doing so, whatever legislation the
Imperial Parliament might produce in the area of property and civil rights.
Coupled with that was, of course, the fact that mortmain had been introduced
into the province by judicial interpretation some fifty years earlier and the
legislation merely confirmed the fact and used a convenient precedent in the
process. Also, at least as far as the Act of 1902 is concerned, it was only one of a
series of statutes passed to consolidate and revise those English statutes that
were still applicable to Ontario.
In 1909 the 1892 and 1902 statutes were repealed and consolidated by
The Mortmain and Charitable Uses Act*8 No major changes were made by this
Act except one. The 1902 Act, like the English Act of 1888, contained no
divestment provision in the case of inter vivos assurances to charities. The 1909
Act inserted a provision49 similar to that applicable to devises of land. The
reason for the addition is the subject of speculation. The matter may have been
overlooked in 1902, or it may have been done simply to make the two provi-
sions conform as much as possible. In this case, there was no comparable English
legislation that might have been copied.50
Since 1909, there have been no major amendments to the legislation
except in 1953 when an amendment was made51 which had the effect of render-
ing non-compliance with the mortmain part of the Act voidable only instead of
void.52
46S.O. 1892, c. 20.
47S.O. 1902, c. 2; also cited as R.S.O. 1897, c. 333.
48S.O. 1909, c. 58.
49 The present s. 7.
50 The only reference to this section appears in the Records of the Statute Law Revision
Council, 1890-1912 (Ont.), vol. 3, pp. 1007-8, in which the opinion was expressed by
Mr. Dymond, then the Attorney General, that church corporations ought not to be
able to hold large tracts of land in urban areas without making them productive and
that the best way to solve the problem was to apply the two-year sale provision to
grants as well as to devises.
slS.O. 1953, c. 68.
"The amendment merely confirmed earlier judicial interpretations of the Act, viz.
McDiarmid v. Hughes (1888), 16 O.R. 570, and Euclid Avenue Trusts Co. v. Hohs
(1911), 23 O.L.R. 377, affirmed 24 O.L.R. 447 (C.A.). See also: Re Garner and
Gavan, [1952] O.R. 385, [1952] 2 D.L.R. 804 (C.A.); and Inter City Baking Co.
Ltd.y.Rosenblood, [1954] O.W.N. 531 (C.A.).
11
7. Mortmain Legislation in Other Provinces
As indicated earlier, several of the other provinces rejected the introduc-
tion of mortmain by judicial interpretation. Nor did they ever pass legislation
similar to that in force in Ontario. Quebec is an exception in this respect. It did
and does have mortmain legislation,53 but since major amendments thereto in
1964 in the main it no longer affects the title to real estate. In Quebec, mort-
main permits are required only for companies incorporated in other jurisdic-
tions, but under the Mortmain Act54 companies incorporated in Great Britain,
the United States of America and Canada do not require such permits to hold
land "for their occupation or the prosecution of their business". Corporations
incorporated for the purpose of promoting art, science, religion, charity, or
similar objects do, however, still have to take out a licence in mortmain to hold
more than ten acres of land. It should be noted that the Quebec legislation is
true mortmain legislation, since it is restricted to corporations.
In some of the other provinces there has been some legislative activity in
the past as regards the holding of land by charitable and other non-profit organi-
zations, incorporated or unincorporated. Almost without exception such legisla-
tion placed a limit on the amount of land that could be held by such organiza-
tions. Save for one or two exceptions pertaining to religious organizations which
remain and which will be dealt with in Chapter 5, these have all been repealed
and can be disregarded for the purposes of this Report.
In the United States, some states have enacted legislation restricting the
proportion of an estate that can be given to charity. However mortmain and
charitable uses legislation of the type that exists in Ontario appears to be unique
as far as the common law jurisdictions are concerned.
It will be seen from the foregoing that the perceived need winch prompted
the enactment of mortmain legislation is no longer regarded as a problem in
other jurisdictions; and that for all intents and purposes it would appear that
Ontario remains the only jurisdiction today which retains tins type of legislation.
"Mortmain or "mainmorte" was introduced into Quebec by Royal Edict in 1743. The
Edict was directed against religious communities and other persons in mortmain and
prohibited them from acquiring immovables except by royal letters patent. These
mortmain provisions were carried forward into the Civil Code of 1866 and thence
into the Mortmain Act, lastly consolidated in R.S.Q. 1964, c. 276.
54R.S.Q. 1964, c. 276, s. 2.
CHAPTER 3
POLICY CONSIDERATIONS WITH RESPECT TO
THE MORTMAIN AND CHARITABLE USES ACT
1. Introduction
Most other jurisdictions have apparently determined that mortmain and
charitable uses legislation fails to fulfill a need in modern society. The question
is, therefore, legitimate and appropriate: are there valid reasons why such legisla-
tion should be retained in Ontario either in whole or in part? The Select Com-
mittee on Company Law, reporting in 1967,1 expressed itself very forcefully in
favour of total repeal of The Mortmain and Charitable Uses Act.2 While the
Commission is sympathetic to that position, we believe that there are certain
policy considerations involved in the repeal of the legislation which merit close
scrutiny and we discuss these in this chapter.
There are three possible courses of action, namely:
(1) to repeal the legislation completely,
(2) to repeal the mortmain provisions but retain the provisions respect-
ing charitable uses, or
(3) to retain the entire Act, perhaps with amendments.
The first alternative does not, at this point, require much justification.
Quite apart from the fact that Ontario appears to be virtually alone in retaining
this type of legislation, it may be readily conceded that the historical justifica-
tion for the legislation is no longer of particular concern today. We no longer
perceive the tying up of land "in the dead hand", that is in perpetual corpora-
tions, as a social evil since we have given corporations broad powers to acquire
and hold land for their objects. Besides, corporations are today well-regulated
and supervised by the state so that abuse of this power is unlikely to occur.
Moreover, the reasons for the English Mortmain Act of 1736, 3 such as the desire
to prevent testators from disinheriting their families, to restrain death-bed char-
ity (especially to the church) and to prevent the tying-up of large quantities of
land by charitable trusts, if indeed these were the real reasons for the Act,4 have
also largely disappeared. The common law had never imposed restrictions on a
person's power to dispose of his property as he saw fit. Indeed the policy was
otherwise; it favoured free alienation and freedom of testation. To the extent,
that it is of concern in today's society that a person does not leave his descen-
dants destitute, the Legislature has provided a remedy (albeit a partial one) in
The Dependant's Relief Act.5 Similarly, the fear of the clergy importuning
testators on their death-beds invokes a vision of bygone days. In any event, the
common law has developed adequate safeguards with respect to undue influence
so that this is no longer a serious problem. Even if it were, the Act does not
effectively achieve its purpose since it applies only tc land, which today no
longer comprises the bulk of most estates.
1 Interim Report of the Select Committee on Company Law (Toronto, 1967), pp. 109.
111.
2R.S.O. 1970, c. 280, as am. by S.O. 1972, c. 85.
39Geo. 2, c. 36(1736).
4 Supra, c. 2, at p. 6.
sR.S.O. 1970, c. 126.
[13]
14
With respect to the second alternative, we are of the opinion that the
mortmain provisions have, at best, marginal present utility. On the other hand,
we believe that there may be, as a policy matter, a greater residual justification
for retaining the restrictions on the investment in land by charities for the
reasons we shall discuss in this chapter.
The third alternative contemplates the retention of mortmain as well.
Mortmain has, arguably, a residual utility in that it is one of the few means of
monitoring foreign ownership of land at present. We believe that it does so very
ineffectively. However, if as a matter of policy it is decided to retain mortmain
pending development of a more effective means of monitoring and controlling
foreign ownership of land, it could be retained on an interim basis under the
third alternative.
We have referred earlier to certain broad questions of public policy which
will affect the ultimate decision to repeal all or part of The Mortmain and
Charitable Uses Act.6 In this chapter, we shall discuss these questions in order to
show how they may influence that decision. As we indicated earlier the Commis-
sion is not in a position to come to a final resolution of these difficult issues of
social policy.
2. Foreign Ownership of Land
Ownership of land by non-residents is undeniably a matter of serious
concern to both federal and provincial governments in Canada. The Foreign
Investment Review Act,1 which at least indirectly affects ownership of land by
non-residents is the one piece of legislation that is most prominent in this re-
spect. Equally significant is the Interim Report of the Select Committee on
Economic and Cultural Nationalism8 which recommended wide-ranging restric-
tions on foreign ownership of real estate in Ontario.
The Mortmain and Charitable Uses Act9 in some measure monitors and
controls landholding by non-residents.10 The charitable uses provisions do this
very simply, if drastically, by prohibiting all charities, foreign and domestic,
from holding land for investment purposes. They may only hold land necessary
for their actual use and occupation, but then only with the Court's permission.
As regards the mortmain part of the Act, control and monitoring is
achieved by the issuance of licences in mortmain to non-profit corporations
incorporated in the other provinces and outside Canada, and federally-incor-
porated companies, which may and often do include subsidiaries of foreign
corporations. The Lieutenant Governor, in practice the Minister of Consumer
and Commercial Relations,11 has a discretion in deciding whether to issue
licences in mortmain, but in practice a licence is issued automatically if the
required procedures are followed. However, it would seem doubtful that a
licence would be denied solely on the ground that the corporation was a foreign
or foreign-controlled corporation. The same applies to the issuance of extra-
provincial licences to companies that are foreign-controlled and incorporated in
other provinces. Extra-provincial licences are issued under Part IX of The Corpo-
6 See chapter 1, p. 2.
7S.C. 1973-74, c. 46.
8 Foreign Ownership of Ontario Real Estate (Toronto, 1973).
9 Supra, footnote 2.
10 It should perhaps be noted that there is no indication that foreign ownership of land
was a matter of concern when England repealed its Mortmain legislation in 1960.
11 Supra, footnote 2, s. 4(1), (2).
15
ration Act12 primarily to business corporations incorporated elsewhere than in
Ontario and authorize them to carry on business in the provinces. Licences in
mortmain, on the other hand, authorize the holding of land in the province.
The utility of the first part of the Act in controlling foreign corporate
investment in land is thus questionable. Moreover, it provides a cumbersome,
expensive and ineffective method of monitoring foreign ownership. It is cumber-
some in that it perpetuates a double licensing system, that is, mortmain and
extra-provincial licences, and because the Act has exceptional difficulties of
interpretation which we shall discuss more fully in the next chapter. Because
only a relatively small number of companies are affected by the legislation it
generates little revenue and is expensive to administer. Finally, it is ineffective as
a method of monitoring foreign ownership of land since it applies only to
corporations and then only to a small proportion of them; thus the records kept
by the Companies Branch of the Ministry of Consumer and Commercial Rela-
tions do not accurately reflect the total landholding by non-residents in Ontario.
In fact, there are no statistics that would indicate the extent of foreign landhold-
ings, corporate or otherwise.13 The following table will, however, give some
recent indication of the monetary value of the licences in mortmain held in the
province.14
Licences in Mortmain
Total Canada
Date Corpo- (including U.S.A. Europe Other
rations provinces)
1 Jan., 1968 2,674 $3,327,060,864 $45,315,657 $ 8,949,121 $10,575,700
31 Dec, 1973 2,995 $3,959,709,612 $93,146,096 $106,865,266 $17,802,660
The following table gives the dollar values of extra-provincial licences on
the same dates. The two tables are not really comparable, of course, since
extra-provincial licences are issued on the basis of capital that is to be employed
in Ontario and there is no way of ascertaining how much of that might be
invested in land.
Extra-Provincial Licences15
Total
Canada
Date
Corpo-
rations
(including
provinces)
U.S.A.
Europe
Other
1 Jan., 1968
1,189
$328,221,238
$567,922,215
$15,082,819
$7,830,000
31 Dec, 1973
1,954
$602,541,565
$769,668,904
$25,191,769
$3,234,300
12R.S.O. 1970, c 89.
13 See Interim Report of the Select Committee, supra, footnote 8, p. 12, para. 2.7, p.
27, para. 6.24.
14 Source: Companies Branch, Ministry of Consumer and Commercial Relations. It
should be noted that these figures include both general and specific licences for
which separate records are not kept. The values of general licences are in most cases
probably fairly close to the value of the land held since the licences must be kept up
to that value or else the land is subject to forfeiture. The value of specific licences is
stated only at the date the licence is issued, however. The market value of the lands
held under licence in mortmain is thus likely to be significantly higher than the table
would indicate.
15 Source: idem
16
The total number of corporations under both types of licence on Decem-
ber 31, 1973, therefore, was 4,949 as compared to a total of 110,993 active
corporations incorporated in Ontario as at March 31, 1973. 16
Other monitoring and control devices than those provided in the first part
of The Mortmain and Charitable Uses Act are available and may be more
effective. For example, extending the extra-provincial licensing provisions of The
Corporations Act11 to corporations that now require a licence in mortmain is
one solution that would at the same time simplify the system. Loss of revenue, if
any, would be offset somewhat by more effective administration. If the extra-
provincial licence is substituted for the mortmain licence it is unlikely that the
loss of revenue would be great in any event. If the system of mortmain licences
were simply abolished, instead of replaced, however, a loss of revenue might
result from companies that now incorporate in Ontario but that would have
incorporated federally, but for the cost and inconvenience of obtaining a licence
in mortmain.
A system of registering or licensing federally-incorporated companies (and
others) on the same basis as other extra-provincial corporations is in use in some
of the other provinces. For constitutional reasons registration or a licence can-
not, of course, be denied to a federal corporation authorized to do business in
the province under its charter, since to do so would interfere with the status and
corporate capacity of a federal company to which Parliament, in the exercise of
its legislative jurisdiction, has given power to carry on business anywhere in
Canada.18 So long as the scheme does not make the registration or obtaining of a
licence a condition of doing business in the province, it is intra vires. If it merely
requires the federal company, within a reasonable time after it commences to
carry on business in the province, to register its name and other particulars with
the province, and to pay such fees as do not exceed those payable by provincial
companies, the legislation equally is intra vires. Such legislation would fall within
the provincial powers to levy a direct tax, and to legislate in respect of property
and civil rights. It is open to the province to impose a monetary penalty for
non-compliance.19 The provisions of the present Alberta, British Columbia and
Manitoba Companies Acts appear to satisfy these criteria.20
A scheme such as the one outlined is, of course, only a monitoring system,
and appropriate for that purpose; but it is not adequate if it should be desired to
impose controls on land ownership by certain types of individuals and organiza-
tions. Since this is a constitutional matter which involves organizations in addi-
tion to corporations we will consider it separately.
16 Ministry of Treasury, Economics and Intergovernmental Affairs, Corporate Growth
in Ontario, 1972-73 (1973), p. 11, Table 4.
17R.S.O. 1970, c. 89, Part IX.
l&The Great West Saddlery Co. Ltd. v. The King, [1921] 2 A.C. 91, 58 D.L.R. 1 (P.C.).
The case held that the Extra-Provincial Corporations Act, R.S.O. 1914, c. 179, and
similar provisions in the Manitoba and Saskatchewan Companies Acts were ultra vires
the provinces in that they required federal companies to obtain a licence as a condi-
tion of doing business in the province and imposed penalties for failure to do so,
including an incapacity to bring actions. The case also held that a Dominion company
can be denied the right of holding land in a province under an Act of general
application such as The Mortmain and Charitable Uses Act of Ontario.
19Ibid., [1921] 2 A.C. 91, 123.
™The Companies Act, R.S.A. 1970, c. 60, Part 8, as am. by S.A. 1972, c. 21;
the Companies Act, S.B.C. 1973, c. 18, Part 10, as am. by S.B.C. 1974, c. 127; The
Companies Act, R.S.M. 1970, c. C160, Part IX, as am.
17
3. The Constitutional Issue
Does a province have jurisdiction under section 92 of the British North
America Act, 1867 2l to impose controls on the ownership of land by non-resi-
dents? The answer is, clearly yes, if the statute is of general application.22 The
central issue is, however, whether a province can deny the right to own land to
non-residents or, more specifically, to aliens, or whether any attempt to do so
runs afoul of Parliament's jurisdiction over naturalization and aliens.23 This ques-
tion has been much canvassed in recent years in the context of a legitimate
concern about foreign economic domination, including the acquisition by aliens
of large tracts of prime recreational and agricultural lands as well as lands suita-
ble for development.24 This Report is not the place to discuss either the policy
question or the constitutional issues in great detail.25 Instead, we will focus our
attention solely on the recent case, Morgan v. Attorney General for P.E.I.26
This case for the first time brought the matter squarely before the Su-
preme Court of Canada which decided it in favour of the provinces. At issue was
the constitutional validity of section 3 of Prince Edward Island's Real Property
Act.21 The relevant section28 prohibits a person who is not a resident of the
province from acquiring or holding, directly or indirectly, title to any real prop-
erty in the province, in excess of ten acres in the aggregate or of five chains'
shore frontage in the aggregate except with permission of the Lieutenant Gover-
nor in Council, in whose discretion such permission lies.29 The section defines
"resident of the Province of Prince Edward Island" as "a bona fide resident,
animus et factum", of the province.30 The legislation replaced similar legislation
which was directed not at non-residents, but at aliens.31
The Supreme Court of Prince Edward Island in banco concluded32 that the
prior legislation was invalid in that it was directed at aliens and thereby infringed
the federal power. It held the new legislation to be intra vires in that it was not
directed at aliens per se.
2130& 31 Vict, c. 3 (U.K.).
™The Great West Saddlery Co. Ltd. v. The King, [1921] 2 A.C. 91, 119; Morgan v.
Attorney General for P.E.I. (1975), 55 D.L.R. (3d) 527 (S.C.C.).
"British North America Act, 31 & 32 Vict.,c. 3, s. 91(25).
24 The following is a sample of the material on the subject: Interim Report of the Select
Committee on Economic and Cultural Naturalism, supra, footnote 8; Report of the
Task Force on the Structure of Canadian Industry, the "Watkins Report" (Ottawa,
1968); Report of the Commons Standing Committee in External Affairs and National
Defence, Special Committee Respecting Canada-U.S. Relations, No. 33, the "Wahn
Committee Report" (Ottawa, 1970); Foreign Direct Investment in Canada, the "Gray
Report" (Ottawa, 1972); Arnett, "Canadian Regulation of Foreign Investment: The
Legal Parameters" (1972), 50 Can. Bar Rev. 213; Donaldson and Jackson, "The
Foreign Investment Review Act: An Analysis of the Legislation" (1975), 53 Can. Bar
Rev. 171; Spencer, "The Alien Landowner in Canada" (1973), 51 Can. Bar Rev. 389.
25 See chapter 1, supra, p. 2.
26 (1975), 55 D.L.R. (3d) 527 (S.C.C.). The reasons for judgment were delivered by
Laskin, C.J.C.
27 R.S. P.E.I. 1951, c. 138, as amended by 1972, c. 40, s. 1.
™Ibid., s. 3(2).
2*Ibid., subs. (3).
™Ibid., subs. (5)(b).
31 An Act to Amend the Real Property Act, S.P.E.I. 1964, c. 27.
32(1974), 42 D.L.R. (3d) 603.
18
It was conceded in argument before the Supreme Court of Canada that the
legislation did not extend to corporations, having regard to the definition of
"resident" as a "bona fide resident, animus et factum". That does not mean that
it could not do so if the term were properly defined.33
The Supreme Court of Canada held that section 3 was valid provincial
legislation both as respects Canadian citizens and aliens who reside outside the
province of Prince Edward Island. The legislation, in the Court's view, was not in
pith and substance in relation to citizenship and aliens merely because it differ-
entiated between citizens and aliens on the basis of residence. It is open to a
province, according to the Court, to legislate in respect of the capacity of a
person "whether alien or infant or other" to hold land in the province, since
such legislation is directly concerned with a matter over which the province has
legislative jurisdiction, that is property and civil rights. What a province may not
do is to sterilize the general capacity of a Canadian citizen or an alien freely to
enter the province, to take up residence there and to earn a livelihood there. In
that respect the Court compared the issue to that concerning the validity of
provincial legislation affecting federally -incorporated companies. A province
may not prevent them from establishing themselves as viable corporate entities
within its borders, but such companies may be subjected to provincial regulatory
legislation in the same way as all others.34
The test to be applied in determining the validity of such legislation is
whether it represents a colourable device, under the cloak of property and civil
rights or another object within provincial competence, to legislate with respect
to the general capacity of aliens or naturalized persons.
It should be noted that the Morgan case does not decide whether legisla-
tion directed solely at persons not resident in Canada would be valid. A strong
argument can be made that such provincial legislation would be valid. The case
does appear to say that legislation of this type may be directed to either aliens or
citizens or both aliens and citizens who reside elsewhere than in the province
subject, of course, to the foregoing test.
The question thus remains, when does the legislation become a colourable
attempt to legislate with respect to aliens? More specifically for the purpose of
this Report, to what extent can a province control the landholding of foreign or
foreign-controlled corporations, and in particular federally-incorporated subsid-
iaries of foreign or non-resident corporations?35
These questions did not, of course, fall to be decided in the Morgan case
and they remain unresolved. It would appear, however, that carefully drafted
legislation would avoid the constitutional strictures. The Province of Ontario has
already acted in this respect in controlling foreign investment, principally in the
case of financial institutions and, more recently, in controlling foreign ownership
33 A Royal Commission in Prince Edward Island has recommended that this defect be
remedied. See Interim Report of the Royal Commission on Land Ownership and Use
(Charlottetown, 1973).
34C/ The Great West Saddlery Co. Ltd., v. The King, supra, footnote 18; and see also
Report of the Attorney General's Committee on Securities Legislation in Ontario,
Part IX, "Constitutional Considerations" (1965).
35 We only refer to corporations since the case itself covers individuals. Furthermore, we
assume that an appropriate definition of a non-resident corporation can be devised.
The same would apply to other entities such as non-resident trusts.
19
of certain types of land in the province.36 Furthermore, the Select Committee
on Economic and Cultural Nationalism has made a number of recommendations
which would have the effect of ensuring that future acquisition of land gener-
ally, be substantially restricted to Canadian citizens and landed immigrants resi-
dent in Canada and corporations or ventures owned substantially by Canadian
citizens or landed immigrants resident in Canada.37
4. Investment in Land by Charitable Organizations
As we have noted, the effect of the second part of The Mortmain and
Charitable Uses Act now is that it prohibits investment in land by all charities,
incorporated or unincorporated, foreign or domestic. It, therefore, incidentally
has the effect of controlling foreign investment in land by charities, but it does
so at the expense of domestic charities. The origin of the charitable uses provi-
sions is the old mortmain fear of permitting land to be tied up in perpetuity in
charitable corporations, thus withdrawing it from taxation, and of allowing the
concentration of a scarce resource, and thus potentially a great concentration of
economic wealth, in the hands of the church or of "private" charitable trusts.
We can dispense with the mortmain fear as such; it hails from a bygone age. But
that does not mean that there are not any different concerns that have taken its
place and winch are relevant today.
In the first place, lands held by charitable organizations are indeed with-
drawn from taxation, that is, the profits earned on their investment in land
would not be subject to income tax, under the present law. Nor having regard to
the divided jurisdiction in this respect between Parliament and the provincial
legislatures, is this a matter that can be remedied easily. Charities are generally
subject to be assessed for municipal taxes, only certain types of charities being
exempt from assessment with respect to property actually used and occupied by
them.38 It may be that charities are thus in a favoured position as regards
investment in land, as opposed to business entities with which they compete.
This is not necessarily an "evil" if it is determined that private charities continue
to have a significant role in today's society. The Nathan Committee was of the
opinion that they do continue to perform a useful role in this respect39 and we
agree. Moreover, it should be remembered that charities are similarly favoured
over business ventures in respect of profits on investments other than land.
36 See Donaldson and Jackson, supra, footnote 24. The following examples are cited by
them at p. 175, nn. 21, 22: The Business Corporations Act, R.S.O. 1970, c. 53 as
am., ss. 122(3), 130(2), 132(2) and 133(1), (3); The Credit Unions Act, R.S.O. 1970,
c. 96, as am., s. 38; The Insurance Act, R.S.O. 1970, c. 224, as am., Part XVII; The
Investment Contracts Act, R.S.O. 1970, c. 226, as am.; The Loan and Trust Corpora-
tions Act, R.S.O. 1970, c. 254, as am., s. 150, and R.R.O. 1970, Reg. 570, s. 11; The
Paperback and Periodical Distributors Act, 1971, S.O. 1971, c. 82, as am., ss. 8, 9;
The Pension Benefits Act, R.S.O. 1970, c. 342, as am., s. 28, and R.R.O. 1970, Reg.
654, s. 14 as am.; The Securities Act, R.S.O. 1970, c. 426, as am. by S.O. 1971, c.
31, and O. Reg. 600/74; The Trustee Act, R.S.O. 1970, c. 470, as am., s. 26; The
Land Transfer Tax Act, 1974, S.O. 1974, c. 8, as am. by S.O. 1974, cc. 16, 93; and
The Land Speculation Tax Act, 1974, S.O. 1974, c. 17, as am. by S.O. 1974, cc. 107.
121, s. 2(2).
"Interim Report, supra, footnote 8, Summary of Recommendations, pp. 53-4.
™The Assessment Act, R.S.O. 1970, c. 167, s. 3. These include places of worship,
churchyards or cemeteries, public educational institutions, seminaries, public hospi-
tals, public libraries and public literary and scientific institutions, etc.
39 Nathan Committee Report, Cmd. 8710 (1952)
20
On the other hand, if charities are to be allowed to invest in land freely, it
is not inconceivable that potentially great concentrations of economic wealth
consisting of land, a scarce resource, will be controlled in perpetuity by a few
wealthy individuals through "private" charitable trusts or foundations. The
Charitable Gifts Act40 was enacted in 1949 precisely to prevent such concentra-
tion of economic wealth by requiring a charity to dispose of that part of any
interest in a business venture that it has acquired that exceeds a ten percent
interest therein within seven years of its acquisition. Consideration should, there-
fore, be given to the question whether an evasion of the principle of this Act is
threatened if, as a matter of government policy, charities are given an unrestrict-
ed right to invest in land, and if so whether The Charitable Gifts Act should be
amended to extend to direct investment in land as well.
5 . Special Exemptions
In considering the foregoing questions, regard should also be had to the
exemptions to both parts of The Mortmain and Charitable Uses Act and those
created by private legislation. It should be noted that over the years many
organizations have obtained exemptions from the Act by private Act. Many
universities and colleges, for example, have in this way been specifically ex-
empted41 from The Mortmain and Charitable Uses Act. It should also be noted
that while the Act applies to municipal corporations42 their powers under The
Municipal Act43 to acquire property are now so wide that they are virtually
exempt from The Mortmain and Charitable Uses Act. The same applies to most
other public bodies such as musea, hospitals, and the like.44 Moreover, the Act is
readily avoided by such public bodies and by municipalities through their wide
powers of expropriation.
Relief from The Mortmain and Charitable Uses Act by private Act has
been obtained over the years in a variety of ways. In many of the older statutes
there was often a provision dispensing with the obligation to obtain a licence in
mortmain and permitting the corporation to take lands by purchase, gift or
devise, but to require their sale within seven years of acquisition if they were not
needed for its actual use and occupation.45 Some simply provided for the addi-
tional power of taking by devise subject to the proviso that the will was made at
least six months before the testator's death and to similar restrictions.46 Such
provisions were superseded by the later Mortmain and Charitable Uses Act,
1892.47
During the early years of this century, the typical form of private Act
provided relief from the necessity of obtaining a licence in mortmain, permitted
a charity to hold land for its actual use, and granted a longer period of time
40R.S.O. 1970, c. 61. Control of the Toronto Star by the Atkinson Foundation was the
impetus for the legislation.
41 Infra, chapter 4, at footnote 74.
42 Corporation of Whitby v. Liscombe (1876), 23 Gr. 1.
43R.S.O. 1970, c. 284.
44 Infra, chapter 4, at footnote 68.
45 See, e.g., An Act to Unite Toronto Baptist College and Woodstock College under The
Name of McMaster University, 50 Vict., c. 95, s. 2 (1887).
46 See, e.g., An Act Respecting the Union of Certain Presbyterian Churches therein
Named, 38 Vict., c. 75, s. 10 (1875).
4755 Vict., c. 20. See Re Barrett (1905), 10 O.L.R. 331;Madill v. McConnell (1907),
16 0.L.R. 314 (Div. Ct.).
21
within which land not so required had to be sold.48 Since 1940, several "private"
organizations have obtained complete exemption from the Act,49 although by
no means all have been so favoured.50 There is no discernible pattern to the
granting of relief from the legislation by private Act. In general it can be said
that "public" charities, such as universities and schools, are usually completely
exempted from the Act. In the case of "private" charities such as religious
societies and foundations some restrictions are often retained.
In the main, therefore, there has been a tendency in private Acts to grant
exemptions from the Act and the question is therefore appropriate whether the
restrictions ought to be retained for any others. The Nathan Committee in
England51 and the Ontario Select Committee on Company Law52 thought not.
6. Regulation and Monitoring of Charities
The Mortmain and Charitable Uses Act to a very limited extent performs a
monitoring function with respect to charities. Repeal of the Act will thus not
alter that significantly. While the matter does not fall strictly within the terms of
this Reference, the Commission is concerned that the present system of regulat-
ing and monitoring charities is not as effective as it might be. While The Charities
Accounting Act53 requires charities or their trustees to inform the Public Trustee
whenever the charity acquires any real or personal property, this provision is
more often honoured in the breach than in the observance. Nor is there a
mandatory requirement to provide the Public Trustee with regular returns of
information or accounts under this Act although those must be supplied on his
request. The Commission is of the opinion that a review of the administration,
regulation and monitoring of charities by an appropriate body would be timely
and in the public interest. In this connection, it should be noted that the federal
Department of Finance has made certain proposals for the filing of information
by charities under the Income Tax Act54 in its Discussion Paper, The Tax Treat-
ment of Charities.55 A similar scheme in Ontario to that proposed by, or a
cooperative scheme with, the federal authorities for gathering and publishing
such information would appear to be extremely useful.
7. Future Utility of The Mortmain and Charitable Uses Act
The Commission is of the opinion that The Mortmain and Charitable Uses
Act is not an appropriate vehicle to achieve the policy objectives outlined above,
48 Numerous examples could be cited. The following are typical examples of this
period: The United Church of Canada Act, S.O. 1925, c. 125, ss. 19, 26; The Roman
Catholic Episcopal Corporation for the Diocese of Alexandria Act , S.O. 1939, c. 71,
s. 6.
49 Examples are: The Baptist Convention Act, 1944, S.O. 1944, c. 71, s. 1; The
National Organization of the New Apostolic Church of North America Act, 1957,
S.O. 1957, c. 145, s. 1; The St. John's School (Elora) Act, 1972, S.O. 1972, c. 196, s. 6.
S0See, e.g., The Lutheran Church - Missouri Synod Act, 1968, S.O. 1968, c. 159, ss. 1,
2 (power to acquire and hold subject to sale within 7 years of the time that the land
is no longer required tor actual use or occupation or for carrying on the under-
taking); The Masonic Foundation of Ontario Act, 1964, S.O. 1964, c. 134, s. 6
(power to hold property subject to the Act); contrast The Thunder Bay Foundation
Act, 1971, S.O. 1971, c. 128, which appears not to be subject to the Act at all.
51 Nathan Committee Report, Cmd. 8710(1952).
52 Interim Report, supra, footnote 1.
s3R.S.O. 1970, c. 63.
54 S.C. 1970-71-72, c. 63, as am.
"Ottawa, 1975.
22
if indeed it is decided that those objectives should be pursued. The Act is too
complicated; its terms often conflict; it often makes little sense; it is little
understood by the legal profession, let alone by members of the lay public.
In our opinion the mortmain part of the Act has outlived its usefulness
and should be repealed in its entirety. These provisions can be replaced with a
monitoring scheme that is integrated with that now applicable to extra-provin-
cial corporations, if that is thought desirable.
The matter of controls on foreign ownership of land is one which arises
only incidentally out of the mortmain and charitable uses restrictions and is
outside the terms of this Reference. However, if as a matter of government
policy it is decided that a system of controls on ownership of land by non-resi-
dent corporations and other entities is desirable, we believe that such a system
should be established by new legislation. The Mortmain and Charitable Uses Act
is not an appropriate vehicle for that purpose.
In our view the restrictions on charitable uses are unduly complex. If it is
thought desirable to continue to restrict direct investment in land by charities,
the charitable uses provisions of the Act should be repealed and replaced with
new and simpler legislation to achieve that purpose. Such legislation might either
form a separate Act or be incorporated into The Qwritable Gifts Act. Indeed,
we think it would be desirable to consolidate the several enactments dealing with
charities and charitable uses, namely The Charitable Gifts Act, The Charities
Accounting Act and any retained or re-enacted sections relating to charitable
uses of The Mortmain and Charitable Uses Act.
In the event that it is determined that the present legislation should be
retained, we are of the opinion that it should be substantially amended. To that
end, we will examine the Act in detail in the next chapter and make recommen-
dations accordingly. Those recommendations are perforce alternatives to those
presented in this chapter.
8. Consequential Amendments and Repeals
If our recommendation for repeal of the mortmain provisions of The
Mortmain and Charitable Uses Act is adopted, certain consequential amend-
ments and repeals must be made. These include the following:
(a) The first sentence of section 4 of An Act respecting Real Property
(Quia Emptores),56 now provides that land shall not be alienated
into mortmain. It should be repealed.
(b) Section 43 of The Registry Act,57 makes provision for evidence that
assurances of land, when registered, are not made in mortmain. It
should be repealed.
(c) Section 97 of The Land Titles Act58 makes a similar provision in
respect of registrations under that Act. It should be amended to
exclude any reference to a licence in mortmain.
The repeal of mortmain would broaden the right of companies incor-
porated under The Business Corporations Act59 to hold land. Such corporations
56R,S.O. 1897, c. 330(R.S.O. 1970, Appendix A).
57R.S.O. 1970, c. 409.
S8R.S.O. 1970, c. 234.
S9R.S.O. 1970, c. 53.
23
would be enabled to hold land indefinitely even if it is not required for their
actual use and occupation or for carrying on their undertakings.60 In the case of
a company incorporated under The Corporations Act, lands not held for such
purposes must be sold within seven years of their acquisition, or after they
ceased to be so necessary, or within such further period of time as the Lieuten-
ant Governor in Council may permit.61 Such a provision was not introduced into
The Business Corporations Act because the mortmain provisions of The Mort-
main and Charitable Uses Act performed a similar function. If those provisions
are repealed, we recommend that consideration be given to the enactment of an
amendment to The Business Corporations Act similar to section 306 of The Cor-
porations Act .
Submissions received by the Commission suggest that compliance with the
charitable uses provisions of The Mortmain and Charitable Uses Act may be
honoured more in the breach than in the observance, in that land assured to
charitable uses is in some cases not sold within the two-year period stipulated by
the Act. The reason for the failure to do so, we suspect, is lack of knowledge of
the terms of the Act. The result is, however, that the titles to such lands vest in
the Public Trustee under the terms of the Act. Since there is at present no
effective method to monitor assurances to charity, such divestment may often
go unnoticed by the Public Trustee and by the former owners. Indeed, we
suspect that in many cases such lands are in due course conveyed by the charities
concerned to third parties even though the charities have no title to convey.
Repeal of the charitable uses provisions will not cure such defective titles.
Nor will the enactment of substituted legislation have that effect. In order to
cure such defective titles once for all, we recommend that it should be provided
that all land that has vested in the Public Trustee under the Act, but which has
not yet been sold by him should automatically revest in the charities or their
trustees. The provision should extend to validate the title of third parties to land
conveyed to them by charities which lacked title to convey. Moreover, even if
new legislation is to be enacted continuing the restrictions on direct investment
in land by charities, such a provision is necessary in order to cure defective titles
existing at the date of the enactment of such new legislation.
RECOMMENDATIONS
The Commission makes the following recommendations:
1 . The mortmain provisions should be repealed in their entirety and, if
thought to be desirable, they should be replaced with a monitoring
, scheme that is integrated with that in effect with respect to extra-
provincial corporations.
2. If as a matter of government policy it is decided that a system of
controls on landholding by non-resident corporations and other
entities is desirable (a matter which is outside the terms of this
Reference) such a system should be established by new legislation,
rather than by a continuance and "shoring-up" of The Mortmain and
Charitable Uses Act.
60 The Act in s. 15(2), para. 12, confers upon business corporations this power to hold
land, ancillary to their objects.
61R.S.O. 1970, c. 89, s. 306.
24
3. If as a matter of government policy it is thought desirable to con-
tinue to restrict direct investment in land by charities, the charitable
uses provisions of the Act should be repealed and replaced with new
and simpler legislation to achieve that purpose. Such legislation
might either form a separate Act or be incorporated into The Chari-
table Gifts Act. A consolidation of The Charitable Gifts Act, The
Charities Accounting Act, and any retained sections related to chari-
table uses of The Mortmain and Charitable Uses Act is desirable.
4. The administration, regulation and monitoring of charities should be
reviewed by an appropriate body and legislation drafted requiring
regular disclosures by and publication of information concerning all
charities.
5. The following consequential amendments and repeals should be
made:
(a) The first sentence of section 4 of An Act Respecting Real
Property (Quia Emptores), R.S.O. 1897, c. 330 (R.S.O. 1970,
Appendix A) should be repealed.
(b) Section 43 of The Registry Act, R.S.O. 1970, c. 409, should
be repealed.
(c) Section 97 of The Land Titles Act, R.S.O. 1970, c. 234,
should be amended to exclude any reference to a licence in
mortmain.
6. Consideration should be given to the enactment of an amendment to
The Business Corporations Act similar to section 306 of The Corpo-
rations Act, requiring the sale of land within seven years after it is no
longer required for actual use of a corporation or for carrying on its
undertaking.
7. Provision should be made for the automatic revesting of land in
charities or their trustees, where the land has vested in the Public
Trustee but has not yet been sold by him. The provision should be
retroactive so as to apply to cases where the charity has disposed of
the land to a third party. Such a provision should be enacted
whether or not divestment provisions similar to the existing ones are
to be incorporated into any new legislation, thereby curing defective
titles at the date of the enactment.
CHAPTER 4
OPERATION AND SCOPE OF THE
MORTMAIN AND CHARITABLE USES ACT
In the previous chapter we examined the policy considerations to be taken
into account in deciding whether to repeal either or both parts of The Mortmain
and Charitable Uses Act.1 We then made certain recommendations for the repeal
of both parts of the Act and their replacement by simpler legislation if, as a
matter of government policy, it is decided to retain certain controls.
We now propose to examine the existing legislation and to make specific
recommendations for its amendment if it is decided to retain the legislation.
1 . Definitions
The Act prohibits assurances of land for certain purposes and defines
"assurance" very broadly as including "a gift, conveyance, appointment, lease,
transfer, settlement, mortgage, charge, encumbrance, devise, bequest and every
other assurance by deed, will or other instrument".2 "Land", on the other hand,
is defined as including "tenements and hereditaments corporeal and incorporeal
of whatever tenure, but not money secured on land or other personal estate
arising from or connected with land".3
This definition of land was first introduced by the English Act of 1891 4 to
cure a defect in the Act of 18885 which included in the definition of land "any
estate or interest in land";6 it in turn dated back indirectly to the Act of 1736.7
The effect of the change may be briefly noted, since it is now only of historical
interest. Prior to 1891 the words "or interest in land" brought within the ambit
of the charitable uses legislation all gifts which were in one manner or another
connected with land including, for example, a devise of land upon trust to sell
and to pay part of the proceeds to charity. Such proceeds were referred to as
"impure personalty" or "personalty savouring of realty" and would be struck
down, since the definition was directed to a consideration of the donor's interest
in the property. The definition in the English Act of 1891 and in the Ontario
Act, however, asks the question: What is the nature of the interest that the
charity was intended to receive? It thus looks at the end result and would save a
gift of the type referred to in the example.8
A difficulty arises because of the difference between the definitions of
"assurance" and "land". The former specifically includes "mortgage" whereas
the latter excludes mortgages by the phrase "but not money secured on land or
1 R.S.O. 1970, c. 280, as am. by S.O. 1972, c. 85.
2Ibid.,s. 1(1) (a).
*Ibid.,s. 1(1) (c).
454&55 Vict.,c. 73(1891).
s51 & 52 Vict., c. 42(1888).
6Ibid.,s. 10(iii).
7 9 Geo. 2, c. 36(1736).
8See In re Sidebottom, Beeley v. Waterhouse, [1902] 2 Ch. 389 (C.A.), infra, foot-
note 60. For a detailed review of the old law, see Tudor, The Law of Charities and
Mortmain (4th Ed., 1906), pp. 448 ff., and Bristowe, A Treatise on the Mortmain
and Charitable Uses Act, 1891, p. 32 ff. Parenthetically it may be noted that the Act
of 1888 extended the cumbersome definition, presumably in error, to the old mort-
main provisions to which it had never applied before the date of the Act. See Tudor,
p. 428.
[25]
26
other personal estate arising from or connected with land".9 When those defini-
tions are employed in the operative sections of the Act a curious result obtains.
The definitions have the effect of prohibiting some, but not all, investment in
mortgages. In the case of mortmain, section 2(1) states: "Land shall not be
assured [that is, inter alia, mortgaged] to . . . any corporation in mortmain . . ."
unless it holds a licence in mortmain or is authorized to hold such investment by
statute, upon pain of forfeiture. However, a mortgage of a mortgage or any
assignment of a mortgage, by way of gift or for valuable consideration, would
not be prohibited, even if the original mortgage was a mortgage of real estate.10
As regards charitable uses, under section 6 an inter vivos assurance, and
thus also a mortgage of land to charity for less than full and valuable considera-
tion is void unless it satisfies the specified conditions. Apart from the fact that a
mortgage for less than full consideration is inconceivable, a mortgage could not
possibly satisfy these conditions since immediate possession is not normally
transferred to a mortgagee and since a mortgage contains a reservation or condi-
tion. An assignment of mortgage with a provision for reassignment would also be
void for the latter reason. An assignment of mortgage transferred by way of gift
would not offend the section, however.
Under section 7 of the Act which is primarily concerned with inter vivos
assurances for full and valuable consideration, again a mortgage of land to char-
ity is subject to divestment. However, it may be that a mortgage could be
assigned to a charity without hindrance, adopting a strict interpretation of the
Act.
Much to the same effect is section 10(1), which concerns gifts of land by
will. Such land is subject to divestment, but a gift of a mortgage by will may not
be attended by any harmful effect.
The effect of the definitions thus is that they prohibit all direct investment
in land and mortgages by corporations not authorized to hold such land and
mortgages and by charities, while permitting most indirect investment in mort-
gages.
Whether charities should be permitted to invest in mortgages at all is a
policy question which we raised in Chapter 3. However, if the Act is to be
retained we recommend that the anomaly arising from the definitions of "assur-
ance" and "land" be removed.
A further question arises with respect to the inclusion of a "lease" in the
definition of "assurance". The old cases held that only long-term leases of
ninety -nine years or more, fell within the Statutes of Mortmain since those of
shorter terms could not really be said to be perpetual.11 Whether that is also the
law in Ontario is questionable. Presumably all leases fall within the restrictions
of the charitable uses part of the Act.12 As a practical matter in both cases,
9Re St. Amand (1918), 15 O.W.N. 165.
10 It should be pointed out that a mortgage of a mortgage is no longer registrable, the
assignment of mortgage with a provision for reassignment of the mortgage having
taken its place: The Registry Act, R.S.O. 1970, c. 409, s. 56. The same applies to a
charge of a charge, see The Land Titles Act, R.S.O. 1970, c. 234, s. 105(8).
11 See Truro Corporation v. Rowe, [1901] 2 K.B. 875, [1902] 2 K.B. 709 (C.A.), and
cases there cited and Tudor, supra, footnote 8, p. 429. Cf. Nathan Committee
Report, Cmd. 8710 (1952), pp. 62-3, para. 259.
12 Tudor, supra, footnote 8, p. 449.
27
however, only leases that require registration would be caught.13 There is a
sufficient element of doubt involved that calls for clarification of the matter,
and if the Act is to be retained, the reference to a "lease" should be clarified so
as to include only leases that may last for more than seven years whether by
reason of the original term or by right of renewal or both.
Section 1(2) of the Act defines charitable uses as:
(a) the relief of poverty ;
(b) education;
(c) the advancement of religion; and
(d) any purpose beneficial to the community, not falling under
the foregoing heads.
These so-called "four heads of charity" are taken from the familiar classification
by Lord Macnaghten.14 The definition replaces the Preamble to the Statute of
Elizabeth15 which was contained in the English Act of 1891 and the Ontario Act
of 1902.16 The definition is not particularly helpful. In the first place, it was not
intended as a definition but as a classification of the charitable uses listed in the
Preamble. In the second place, the term "charity" has a meaning in law that is
not coterminous with the common meaning. Very briefly, in law an object is
charitable if it is one of the objects listed in the Preamble, is similar thereto or
can be said to "fall within the spirit or intendment" thereof, and is exclusively
devoted to such objects. Whether an object is charitable or not, therefore, is
decided by reference to the Preamble and the case law decided thereunder. An
improved definition of "charitable uses" even if it were possible, is not, however,
a matter which falls directly within our terms of reference.17
2. Mortmain
(a) Generally
Sections 2 to 5 of the Act concern exclusively the subject of mortmain.
The key section is 2(1), which provides:
Land shall not be assured to or for the benefit of or acquired or held
by or on behalf of any corporation in mortmain otherwise than under the
authority of a licence or of a statute for the time being in force.
l3The Registry Act, R.S.O. 1970, c. 409, s. 69(2): leases exceeding seven years must
be registered to preserve priority; The Land Titles Act, R.S.O. 1970, c. 234, s. 115:
no time limit; 3 year limit for overriding interests, s. 51(1), para. 4. Section 43(1) of
The Registry Act requires an affidavit to be attached to an "assurance" in favour of a
non-exempt corporation stating that it is not made contrary to section 2 of The
Mortmain and Charitable Uses Act before it may be registered. Section 97(4) of The
Land Titles Act requires registration of the licence in mortmain or proof that a
licence is not required before a transfer or charge to a corporation may be registered.
14 Income Tax Commissioners v . Pemsel, [1891] A.C. 531, 583.
1543 Eliz. l,c. 4(1601).
16S.O. 1902, c. 286.
17 The Nathan Committee experienced difficulties in framing a statutory definition of
charity and considered the danger of thereby rendering the concept of charity too
inflexible. The Committee eventually decided upon a definition similar to that con-
tained in s. 1(2) of the Ontario Act: Report, supra, footnote 11, especially at p. 36,
para. 140. In the end result, however, an extremely wide definition was incorporated
in the Charities Act, 1960, 8 & 9 Eliz. 2, c. 58. Section 46 of that Act defines
"charitable purposes" as "purposes which are exclusively charitable according to the
law of England and Wales".
28
If land is so assured, it becomes subject to forfeiture to the Crown by the
method prescribed in subsections (2) to (6) of section 2, that is, at least six
months after notice in writing is given by the Crown of its intention to claim the
land and upon the registration of a similar notice against the land. Within the
six-month period the corporation is thus able to comply with the Act either by
obtaining a licence in mortmain or by selling the land. These provisions were
added in 1953 to confirm the judicial interpretation of the legislation that
forfeiture was not automatic but occurred upon entry by the Crown.18
Section 2(1) applies to all corporations except those that are authorized to
acquire and hold land under "a statute for the time being in force", that is, an
Ontario statute. The number of corporations affected by the Act is, therefore,
comparatively small since most corporations owning land in the province do so
under the authority of an Ontario statute.
Thus corporations incorporated under The Business Corporations Act have
the following objects ancillary to those contained in their articles of incorpora-
tion:
11. to construct, maintain and alter any buildings or works necessary or
convenient for its objects;
12. to acquire by purchase, lease or otherwise and hold any land or
interest therein necessary for its actual use and occupation or for
carrying on its undertaking, and, when no longer necessary therefor,
to sell, alienate or convey it;
13. to take, hold and alienate real and personal property that has in
good faith been mortgaged to the corporation by way of security
for, or conveyed to it in satisfaction of, debts previously contracted
in the course of its business, or purchased at judicial sales upon levy
for such indebtedness, or otherwise purchased for the purpose of
avoiding a loss to the corporation.19
Corporations incorporated under The Corporations Act have similar
powers:
A corporation has power,
(a) to construct, maintain and alter any buildings or works necessary or
convenient for its objects;
(b) to acquire by purchase, lease or otherwise and to hold any land or
interest therein necessary for its actual use and occupation or for
carrying on its undertaking, and, when no longer so necessary, to
sell, alienate and convey the same.20
18S.O. 1953, c. 68.
19R.S.O. 1970, c. 53, s. 15(2), paras. 11, 12and 13.
20R.S.O. 1970, c. 89, s. 305. These powers are however, restricted by s. 306 which
provides:
(1) No corporation and no trustee on its behalf shall acquire or hold any
land or interest therein, not necessary for the actual use and occupation of the
corporation or for carrying on its undertaking or not held by way of security,
for more than seven years after its acquisition if the land was never so neces-
sary or after it has ceased to be so necessary.
(2) The Lieutenant Governor in Council may extend the period of seven
years mentioned in subsection 1, but no such extension or extensions shall
exceed five years in all.
(3) A corporation shall give to the Minister when required a full and correct
statement of all land or interest therein at the date of such statement held by
or in trust for the corporation.
29
As a practical matter, because of the delayed forfeiture provisions of sub-
sections (2) to (6) of section 2 of The Mortmain and Charitable Uses Act, these
incidental powers are such that most companies incorporated in Ontario are not
affected by the Act. It should be noted, however, that unless the articles or
letters patent of incorporation of a company contain a general power to acquire
and hold land, it may unwittingly infringe the Act if it acquires lands not
necessary for its actual use and occupation or for carrying on its undertaking,
and by way of security, for in such cases a licence in mortmain would be
required. Otherwise the land would be subject to forfeiture.21
Many extra-provincial corporations are also excluded from the operation
of the Act by reason of Part IX of The Corporations Act,22 which requires
certain extra-provincial corporations to obtain an extra-provincial licence before
they are entitled to carry on business in the province.23 Once an extra-provincial
corporation has such a licence it obtains power "to acquire by purchase, lease or
otherwise, to hold, to mortgage, to sell, to alienate and to convey any land or
interest therein in Ontario necessary for its actual use and occupation or for
carrying on its undertaking.24
Part IX applies primarily to business corporations incorporated elsewhere
than in Ontario. It also applies to corporations that do not have gain for their
objects, federally-incorporated corporations, corporations licensed under certain
provincial statutes such as The Insurance Act25 The Investment Contracts Act26
and The Loan and Trust Corporations Act21 and several other minor exceptions,
but it does not require them to take out licences. Companies incorporated in
Quebec are exempt under a reciprocal scheme provided for in section 368. 28
Corporations licensed under the provincial statutes referred to would thereby
generally acquire the right to hold land in Ontario and would thus be exempt
from section 2 of The Mortmain and Charitable Uses Act. Companies incorpor-
ated in Quebec are also exempt from that provision.29
Section 2 of The Mortmain and Charitable Uses Act therefore applies
primarily to non-profit extra-provincial corporations and certain federally-
incorporated companies. Because Parliament has been given exclusive legislative
jurisdiction in respect of certain subject matters under the British North America
Act, 1867,30 such as railways and banks, The Mortmain and Charitable Uses Act
does not apply to federally incorporated companies having such objects.31
21 In the case of companies incorporated under The Corporations Act only after the
forfeiture provisions of The Mortmain and Charitable Uses Act had been complied
with, and the period prescribed by s. 306 of the former Act, supra, footnote 20, had
elapsed.
22Supra, footnote 20.
23 Ibid., s. 369.
24 Ibid., s. 376.
2SR.S.O. 1970, c. 224.
26R.S.O. 1970, c. 226.
27R.S.O. 1970, c. 254.
28R.R.O. 1970, Reg. 135, s. 31.
29 The Corporations Act, s. 376.
3030& 31 Vict, chapter 3, s. 91 and s. 92, para. 10.
31 The Great West Saddlery Co. Ltd. v. The King, [1921] 2 A.C. 91, 58 D.L.R. 1 (P.C.).
30
(b) Licences in Mortmain
The Mortmain and Charitable Uses Act32 and the regulations thereunder33
provide for the issuance of two types of licences in mortmain, namely, general
licences to hold unspecified land for periods of 15 or 30 years, or in perpetuity,
and specific licences to hold particular land in perpetuity. General licences per-
mit the holding of any amount of unspecified land to a specifically described
maximum value. With the other type, the land, whatever its value, is specifically
described in the licence. The fees charged for such licences vary according to the
type and duration of the licence.34
While the Act provides that licences are issued in the discretion of the
Lieutenant Governor,35 in practice the Minister of Consumer and Commercial
Relations36 who administers the Act, customarily licences are issued automatic-
ally upon compliance with the Act and the regulations. The Ministry follows a
policy, however, of not issuing a general licence to a corporation incorporated
outside Canada.37 Until 1971, the regulations also forbade the issuance of a
general licence to corporations with charitable objects,38 but an amendment in
that year39 changed that policy.
The disadvantage of a specific licence is obvious. If a corporation that
holds land under a specific licence wishes to acquire other land, it is obliged to
obtain a further licence and pay an additional fee. On the other hand, the fee is
based on the value of the land at the time the licence is applied for and a
subsequent rise in the value of the land does not affect the validity of the
licence. This points to the advantages and disadvantages of a general licence. It
permits a corporation that holds several parcels of land and that trades in land to
hold it under one licence without having to reapply each time it acquires new
land. However, in the case of a general licence the corporation must keep its
licence up to date by paying additional fees whenever the value of its land rises
above the maximum value stated in the licence. This can be onerous to a large
corporation that owns many parcels of land, particularly today in a time of
rapidly rising land values. Furthermore, in the case of a general licence issued to
a corporation with charitable objects the corporation must file an initial state-
ment and annual statements giving particulars of the land it holds and any
changes therein, upon pain of termination of the licence within sixty days of
32 S. 4(2).
33R.R.O. 1970, Reg. 611, s. 1(1), as am. by O. Reg. 387/71.
"Ibid., s. 3.
3SS. 4(1).
36 S. 4(2).
37 Kingston, Ontario Corporations Manual, vol. B, p. 6204. It might be noted paren-
thetically that it is also the practice of the Ministry not to issue extra-provincial
licences to federally-incorporated companies although that was done at one time.
Instead, a licence in mortmain is required if the company acquires land. See
Kingston, ibid., p. 6212. It is also the policy of the Ministry not to issue a general
licence in mortmain to a corporation that qualifies for an extra-provincial licence, but
only a specific one. The reason is that otherwise an extra-provincial corporation
could pay only a minimal amount in fees and carry on business in the province
without obtaining an extra-provincial licence.
38R.R.O. 1970, Reg. 611, s. 1(2).
39 O. Reg. 387/71.
31
notice in writing.40 This provision, since it is concerned essentially with moni-
toring charities, belongs more appropriately in The Charities Accounting Act .
41
3. Charitable Uses
The second part of The Mortmain and Charitable Uses Act makes separate
but similar provision for assurances to charitable uses inter vivos and by will. It
will be recalled that the reason for this is historical in that the provisions
respecting wills were added in 1891 in England and in 1892 in Ontario with the
effect of validating gifts of land by will to charities (subject to the two-year sale
provision) where such devises previously had been void.42 Except for section 6
the repeal of which we recommend, the statutory provisions respecting assur-
ances inter vivos or by will are virtually identical. We are of the opinion that
there is no valid reason to retain the separate provisions, or any distinction
between such assurances and if the Act is to be retained we recommend that
they be amalgamated.
(a) Assurances Inter Vivos
Section 6 of the present Act springs from the Mortmain Act of 1736 and
has been developed subsequently in the English Act of 1888 and in Ontario's
legislation since 1902. The provision is not identical in these Acts, however. The
three last mentioned Acts, with minor exceptions, all made the same basic
provision, namely that an assurance could be made to a charity only inter vivos, a
minimum period before the death of the assuror and subject to the specified
conditions being met. Although the provisions applied both to gifts and assur-
ances for full and valuable consideration (that is, purchases by a charity) the
conditions were less onerous with respect to the latter. In both cases, if the
conditions were satisfied, the land was not thereafter subject to divestment.
Section 6 of the present Act, however, expressly provides that it does not apply
to assurances for full and valuable consideration. These, therefore, no longer
have to meet the conditions set in section 6. The proviso was added in the
revision of 190943 when section 7 was also added. The conditions imposed by
section 6 are that the assurance must take effect in possession forthwith, that it
be made without power of revocation, reservation or condition except certain
minor ones listed, and that it be made at least six months before the assuror's
death.
Section 7 now provides for automatic divestment without notice two years
from the date of the assurance (subject to an application to the Court for an
extension of time or to retain the land). Thus both in the case of gifts to and
purchases by charities during the lifetime of the assuror (the donor or the vendor
as the case may be) the land is subject to divestment. This divestment procedure
was an entirely new departure from the existing pattern of legislation in this
area; the procedure was comparable to the provisions made in respect of wills,
but there was no precedent for it in the English Acts.44 The enactment of
section 7 which provides for the automatic divestment of all inter vivos assur-
4°0. Reg. 387/71.
41R.S.O. 1970, c. 63.
42 Supra, chapter 2, pp. 7, 10
43S.O. 1909, c. 58.
44 Supra, chapter 2, p. 10
32
ances to charitable uses renders obsolete section 6 which formerly preserved
certain inter vivos assurances by gift. We therefore recommend its repeal.
It follows that the definition of "full and valuable consideration" which
would be necessary only if both sections 6 and 7 were to be retained, can be
repealed, and we so recommend.
(b) Land Devised by Will
New provisions respecting wills were introduced in England in 1891 and in
Ontario in 1892 to overcome the defects in the existing mortmain legislation
under which a devise could not possibly comply with the statutory conditions.45
The effect of this legislation thus was to validate devises in favour of charities
where they previously were void, but to render them subject to divestment two
years after the death of the testator.
For obvious reasons a direction in a will to lay out personal property in
the purchase of land for the benefit of charity is treated as though there were no
such direction. In other words, the charity would receiye the personal property
instead.46 The opening clause of section 6 contains a similar provision. However,
that section would permit such an assurance to take effect if it met the condi-
tions set out in the section, after which it is subject to divestment under section
7: a complicated and convoluted way to achieve the desired result.47 The charity
does have an opportunity to acquire the land, however, by first applying for
permission to retain it for its actual use.48
(c) The Sanction: Divestment
The divestment provisions contained in section 7 (assurances inter vivos)
and section 10 (devises) are virtually identical. In essence they provide that land
that is assured to or for the benefit of a charity must be sold within two years of
the assurance or the testator's death as the case may be, "or (within) such
extended period as may be determined by a judge of the Supreme Court". If it is
not so sold it vests forthwith upon the expiration of the two years in the Public
Trustee who is directed by the Act49 to cause the land to be sold with all
reasonable speed and to pay the proceeds, after deducting all costs and expenses,
to the trustees for the charity. The practice of the Public Trustee is to request
the charity to find a purchaser and to submit to the Public Trustee evidence of
the manner in which the charity held the land50 together with a resolution
authorizing the sale in the case of a corporate charity, a notarial copy of the
agreement of purchase and sale, a statutory declaration of a realtor expressing
his opinion as to the cash market value and stating the declarant's qualifications
for making the valuation, a photocopy of a solicitor's abstract of title, and a
45 Supra, chapter 2, pp. 7, 10.
46 The Mortmain and Charitable Uses Act, supra, footnote 1, s. 11.
47 An assurance otherwise than by will, however, would take effect if it met the condi-
tions set out in section 6. Yet even an assurance such as this is subject to divestment
under section 7.
48 Ibid. ,s. 12.
"Ibid.,s. 10(2).
50 A copy of the licence in mortmain, the Act of incorporation or letters patent, the
will or other instrument.
33
draft deed with the Public Trustee as grantor and the charity as party of the
third part, duly executed by the charity. If all this material is satisfactory the
Public Trustee will complete the transaction.51
It should be noted that the Court has jurisdiction to make two types of
orders. The first is to extend the time within which the land must be sold.52 The
second authorizes it to approve the retention of the land, if satisfied that the
land "is required for actual occupation for the purposes of the charity and not as
an investment".53 There is a question whether in either case application may be
made to the Court after the property has vested in the Public Trustee. It is
doubtful in Ontario whether the Court has jurisdiction after the property has
vested in the Public Trustee to entertain an application by the charity or its
trustees either for extension or revestment,54 no provision being made in The
Mortmain and Charitable Uses Act for such applications. An English case inter-
preting similar wording, In re Gorham's Charity Gift,55 held that the Court did
have jurisdiction to make an order extending the time for sale even though the
land had vested in the Official Trustee of Charity Lands. The case also accepts
the proposition, however, that the Court lacks power to revest the land in the
charity. These matters remain unresolved in Ontario.56
The grounds upon which applications for extensions and retention may be
brought are also unclear. The sole ground to support an application for retention
is that the lands are required for actual occupation by the charity and not as an
investment.57 It would seem appropriate to allow orders permitting retention of
land acquired for future expansion as well, and we so recommend. In the case of
an application for an extension of the two-year period, the Act does not specify
any grounds.58 In an English case on this point, In re Sidebottom, Beeley v.
Sidebottom,59 Buckley, J., at first instance refused to grant an application for an
extension on the ground that it would benefit the charity by an anticipated
appreciation in the value of the land by reason of a planned subdivision. He held
that the English Act conferred no jurisdiction to extend the time for that reason.
S1 Levis, "The Protection of Charities in Ontario" (1972), 1 The Philanthropist
(Canadian Bar Association) 11, 19.
S2Ss. 7(1), 10(1).
53 Ss. 7(3), 12.
54 An Ontario case, Re Toronto Humane Society, [1920] O.W.N. 414, has held that the
phrase "within the two years or within such extended period" in section 7(1) - and
presumably the same would apply under section 10(1) - requires an application to
be made by the charity, "within the two years'". Under the provisions of s. 10(2) as it
then read, however, (R.S.O. 1914, c. 103) the power of sale was vested in the
administering trustees so that in the particular case the Court, while holding that the
application was technically incorrect, concluded that, since the object of the legisla-
tion was to expedite the sale, it should make an order extending the time and
directing a sale with all reasonable speed.
55 [1939] Ch. 410.
56 Our attention has been drawn to an unreported Ontario case in which a revesting was
ordered: Re Public Trustee and Bloorview Children's Hospital, (1971, Stewart, J.).
No reasons were given for the order. We are of the opinion that the order is of
dubious validity in view of the express terms of the Act which require a sale with
payment of the proceeds to the charity. Directing a sale by the Public Trustee to the
charity for nominal consideration as the order did evades the Act.
57Ss. 7(3), 12.
S8Ss. 7(1), 10(1).
59 [1901] 2Ch. D. 1 (C.A.).
34
The Court of Appeal, however, in a terse judgment intimated that there was
jurisdiction to so extend the time.60
It has been suggested that a distinction can perhaps be drawn between
assurances inter vivos and by will as to the requisite grounds to support an
application for extension.61 The argument proceeds on the basis that the provi-
sions respecting applications for an extension and retention are found in separate
sections in the case of gifts by will,62 whereas they are in the same section in the
case of assurances inter vivos.63 The suggested implication is that an executor or
trustee could ask for an extension for any valid reason including, for example, an
expected increase in the value of the land. The argument fails to note, however,
that the provisions are virtually identical in both the case of assurances inter
vivos and by will and that in the case of the former the provisions are contained
in separate subsections even if not in separate sections.64
If the legislation is to be retained, even for an interim period, these ques-
tions are clearly of sufficient concern that they should be resolved. There would
appear to be no valid reason why it should not be open to either the charity or
the Public Trustee to apply to the court at any time prior to the sale by the
Public Trustee to permit retention by or revesting in the charity or to allow an
extension of time for sale. We recommend that the Act be amended accordingly.
Such an amendment should apply retroactively to any unsold lands, since there
is currently no satisfactory means for curing defects in titles, once the statutory
period of two years has run.
Another matter that caused some difficulty was partially resolved by an
amendment in 1972,65 which added subsection (3) to section 10. This subsection
provides simply that the two-year period does not begin to run until after the
termination of a prior life interest. The amendment had a beneficial effect, for if
the time should commence to run from the date of the testator's death or the
date of an assurance, a charity to which the remainder or reversionary interest
was given would be forced to apply to the Court for an extension66 or to sell its
60 In a subsequent application in that case, supra, footnote 8, the Court of Appeal again
reversed Buckley, J., and held that the English Act of 1892 did not apply on the facts
since the case involved a trust for the sale of land with a direction to pay the
proceeds to charity. This point was not argued on the first application. The Court of
Appeal did indicate, however, that the trustees should sell within a reasonable time
(the charity having no power to revoke the trust and claim the land) or else lay
themselves open to an action by the Attorney General for maladministration of the
charitable trust. See also In re Wilkinson, Esam v. Attorney General, [1902] 1 Ch.
841, to the same effect.
61 Levis, op. cit., footnote 51.
62Ss. 7(3), 12.
63S. 7(1), (3).
64 Something similar is suggested by Waters, Law of Trusts in Canada, p. 540, n. 86, but
he bases it on the erroneous ground that the power of the Supreme Court to extend
the period of retention is mentioned twice, i.e. both in ss. 10(1) and 12. Only the
latter deals with retention.
65S.O. 1972, c. 85, s. 1(1).
66 This has apparently been done. Levis, op. cit., footnote 51, refers to an unreported
case in which such an extension was granted. It would seem clear that an order for
retention cannot be granted until the life interest terminates in such a case since the
charity cannot actually occupy the land until then.
35
remainder or reversionary interest at a discount.67 Unfortunately, the subsection
applies only to wills and to two special situations which may involve wills or
conveyances. It does not apply to conveyances generally. While remainder
interests are not as commonly created today by deed as they are by will, if the
legislation is to be retained we recommend that the same benefit should extend
to the former as well as to the latter.
A related problem arises by reason of an apparent shortcoming in the Act.
The operative sections of the charitable uses provisions are directed against the
acquisition of land by charities, not against its retention once such retention has
been authorized by the Court. It is arguable that once such an order has been
made, a charity may thereafter retain the land even though the land in the future
ceases to be necessary for the actual use and occupation of the charity. We do
not believe that that is the intent of the Act, and we recommend that if the
legislation is to be retained, it be amended to require a sale within the statutory
period, commencing after the land ceases to be so required, failing which it shall
divest.
Sections 8(3) and 13(3), dealt with elsewhere in this chapter, make similar
provisions for certain special cases. These are worded too restrictively, however,
in that they are directed only to the question of land not being required at the
time of its acquisition. These provisions should be similarly amended to provide
for situations where land ceases to be required in the future.
If it is decided to adopt our recommendation that the grounds for permit-
ting retention of land should be broadened to include the case of a charity that
has acquired or wishes to acquire land for future expansion, a similar problem
may arise. It may happen that such land will eventually not be required for the
future expansion of the charity, or will not be utilized within the time specified
in the court order. Such land should also become subject to the statutory sale
provision. Furthermore, to prevent charities from using this ground as a means
of evading the Act, the Court should retain control by permitting retention only
during a specified time period set out in the Act, during which the land should
be utilized for the actual occupation of the charity. If the land is not in fact used
for the purposes of the charity within that time it will become subject to sale or
divestment unless the Court grants a further extension of time. We therefore
recommend that if the legislation is to be retained the Act should be amended to
provide that the Court may by order permit the acquisition or retention of land
by a charity for future occupation during a five-year period from the date of
such order, and that the Court may from time to time grant further orders for
similar periods of time in appropriate cases.
For the reasons given above, sections 8(3) and 13(3) should be amended to
extend the same powers to the situations dealt with in those sections.
(d) Gifts to Public Bodies
A peculiar problem is presented by section 1 3 of The Mortmain and Chari-
table Uses Act. It was first introduced in the revision of 1909 but it has no
67 The amendment reversed the common law as stated in In re Hume, Forbes v. Hume,
[1895] 1 Ch. 422 (C.A.). There is, however, an Ontario case to the contrary, Re
Naylor (1902), 5 O.L.R. 153, but that case was decided under the somewhat similar
provision in s. 19 of An Act respecting the Property of Religious Institutions, R.S.O.
1877, c. 216, which required land devised to a religious society to be sold within
seven years failing which it reverted to the testator's estate.
36
counterpart in English legislation. The section was introduced between the
second and third readings of the Bill and thus may be the result of a lobby
pressing for its inclusion. This is suggested also by subsection (4) which makes
the section retroactive. Thus it would appear that it was designed in part to cure
defective titles. Section 13 provides in essence that the Government of Ontario,
a municipal corporation, a school board, a public library board or association, a
public hospital board "and trustees empowered to administer or hold property
for charitable uses", may accept real or personal property upon the trusts
expressed in the deed, will or other instrument transferring the same. The named
institutions and persons are thereafter severally referred to in the section as
"such body" and "such public body", a reference that is apt except in the case
of the last-mentioned trustees. There is no indication in the Act or elsewhere to
indicate who are meant by this term. Theoretically it could include all trustees
to whom property has been given for charitable purposes since all trustees are
capable of holding property for such purposes. If that were so, however, the
automatic divestment provisions of sections 7 and 10 would be rendered nuga-
tory. Although it is not at all clear from the section, since it refers to "public"
bodies, the reference to trustees for charitable purposes is probably to be read
ejusdem generis with the preceding list of public bodies. Thus, some type of
"public" charitable trust seems to be envisaged. It is also not clear whether the
section intends that the first several named bodies should act as trustees for their
own respective organizations, subject, of course, to the terms of the trust. This is
undoubtedly intended, however, since it is difficult to see why, for example, a
public library board should be authorized to act as trustee for, say, a trust
providing for medical scholarships. If this is so then the section is totally inapt
for such public bodies today have power to hold land and other property for
their respective purposes,68 including property under a trust, and in any event
such land or other property could be held for them by individual trustees or by
the Public Trustee.69 It further appears that when section 13 was enacted,
statutes respecting municipalities, school boards, library boards and the like,
either did not exist or failed to confer power to hold land for the purposes of
such bodies.
Despite the foregoing, we believe that the section retains a residual utility.
It is conceivable that land (or personal property) may be given to a public body
of the type described in the section, when the public body lacks the power to
hold the land for the particular purpose for which it is given. For example, old
houses are sometimes given to a governmental or other public body, to be
maintained as musea. Unless the public body to which it is given is a museum, it
may well lack the power to hold the land. Furthermore, repeal of the section
would necessitate a sale within the time period specified by The Mortmain and
Charitable Uses Act.
Section 13(3) also makes provision for divestment after two years in the
usual terms by incorporating the provisions of sections 10(2) and 12 by refer-
ence. That being the case, it is doubtful that an application for extension of time
could be made for any reason as has been suggested.70 It is to be noted, however,
that in distinction from other charitable trusts no application is necessary for
retention of lands required for actual use and occupation. The only possible
68See e.g. The Public Libraries Act, R.S.O. 1970, c. 381, s. 16.
*9 The Public Trustee Act, R.S.O. 1970, c. 389, s. 12.
70 Levis, op. cit., footnote 5 1 .
37
application under section 13 is thus for an extension of time to sell land not so
required.71
If legislation respecting charitable uses is to be retained in one form or
another, we recommend that section 13 be retained. However, in order to clarify
the meaning of the section, we recommend that the phrase "trustees empowered
to administer or hold property for charitable uses" in section 13(1) be deleted
and be replaced with the phrase "similar public bodies or their trustees".
4. Time Period During which Sale is Required
At present, the Act requires that a sale of land assured to charity and not
required by it for actual occupation be completed within two years or such
extended period as the Court may allow. We are of the opinion that this period
is too short, having regard in particular to the delays which are frequently
encountered in securing refinancing, amendments to zoning by-laws and other
planning and municipal approvals. If the Act is to be retained even for an interim
period we recommend that the statutory period be increased to three years.
5. Exemptions
The Act makes provision for a number of cases which are exempt in whole
or in part from its terms. These are illogically arranged and, it would appear,
badly out of date. Although a few allowances were made for local conditions,
the exemptions were, for the most part, copied directly from the English Act of
1888. It is hard to believe that these exemptions were the only ones that merited
special attention in Ontario in 1902. The inference is rather that little or no
attention was paid, as a policy consideration, to the exemptions. Nor is it always
readily apparent whether an exemption applies to both the mortmain and chari-
table uses parts of the Act. Furthermore, in the exemptions an illogical distinc-
tion is drawn between land acquired by will and inter vivos.
If the legislation is to be retained, we recommend that consideration be
given to the question whether further exemptions from the provisions of the Act
are appropriate, that the exemptions be divided into two groups, those that are
exempt from the mortmain part and those that are exempt from the charitable
uses part of the Act, and that the exemptions should not draw a distinction
between land acquired by will or inter vivos.
We further note the following difficulties. Section 8(2) provides that the
Act (both the mortmain and the charitable uses parts) does not apply in respect
of land acquired for public parks, musea and libraries and for a school or school-
house. Those terms are defined in section 8(1). Section 8(3) provides, however,
that in the case of a school or schoolhouse any land not required for actual use
and occupation must be sold within two years or such extended period as may
be allowed by the Court, and that the provisions of sections 10(2) and 12 apply
thereto. As in the case of section 13(3), section 8(3) does not, therefore, auto-
matically divest land required for actual use as is the case with charities gener-
ally.72 Section 8(3) distinguishes between parks, musea and libraries on the one
71 S. 13(3). It follows that the incorporation by reference of s. 12 is superfluous.
72 Again the incorporation of s. 12 is superfluous. It has been suggested that the
grounds for making an order for retention of land under s. 8(3) may include grounds
other than those expressed or implied by s. 7, by reason of the fact that the pro-
cedural sections respecting vesting and retention applicable to wills, are incorporated
by reference. For the reasons expressed in the text at footnote 64 we submit that the
argument fails.
38
hand, and schools and schoolhouses on the other; the basis of the distinction
seems to be that the first group are by definition for public use while the latter
may refer to public, separate or private schools. It may thus be said that while
section 8 encourages education, it discourages investment in land by schools
probably because of the inclusion of private schools. If the basic premise of the
charitable uses part of the Act, that is discouraging investment in land by chari-
ties, is to survive, the distinction would appear to accord with that premise. The
distinction would disappear if as a policy matter it is decided to repeal the
legislation in its entirety. Again, it is doubtful that, merely by reason of the fact
that the procedural sections respecting vesting and retention applicable to wills
are incorporated by reference, retention of land might be ordered in the case of
inter vivos assurances for a school or schoolhouse for any reason other than
those expressed or implied by section 7, as has been suggested.73
Section 9(a) provides that sections 2 and 6 do not apply to an assurance of
land for the benefit of an "incorporated university, college or school in Ontario,
or for the support and maintenance of the students thereat". It will be noted
that sections 7 and 10 to 12 are not excluded. Thus a university may take and
hold land without obtaining a licence in mortmain and it may take land by inter
vivos gift if the provisions of section 6 are complied with. That is of little use
since section 7 will require a sale within two years. Similarly in the case of a
purchase by or a devise to a university the two-year sale provision applies. It is
hard to imagine that the lack of reference to sections 7 and 10 to 12 was an
oversight in the 1909 revision particularly because section 7 was then added
which so drastically altered the effects of section 6. The result has been that
virtually all incorporated universities, colleges and schools have a provision in
their private Acts to avoid the effects of The Mortmain and Charitable Uses Act.
The following recent provision is a typical one:
The University has, in addition to the powers, rights and privileges
mentioned in section 26 of The Interpretation Act, power to purchase or
otherwise acquire, take or receive, by gift, bequest or devise, and to hold
and enjoy without licence in mortmain and without limitation as to the
period of holding any estate or property whatsoever, whether real or per-
sonal, and to sell, grant, convey, mortgage, lease or otherwise dispose of
the same or any part thereof from time to time and as occasion may
require, and to acquire other estate or property in addition thereto or in
place thereof.74
In view of the apparent legislative policy to permit avoidance of The
Mortmain and Charitable Uses Act by the institutions listed in section 9(a), we
recommend that it be incorporated into section 8(2) and that section 8(3) be
made to apply to them so that such educational institutions will at least be
entitled to retain land required for their actual use and occupation, without the
permission of the court.
Section 9(b)75 also excludes sections 2 and 6, but only as respects assur-
ances "otherwise than by will", to trustees for incorporated or unincorporated
societies associated together for religious purposes, or for the promotion of
education, art, literature, science or like purposes, of land not exceeding two
73 Levis, op. cit., footnote 5 1 .
™The University of Western Ontario Act, 1974, S.O. 1974, c. 163, s. 8(2).
75 The origin of this subsection is ss. 1 and 2 of the Building Sites for Religious and
other Purposes Act, 31 & 32 Vict., c. 44 (England, 1868).
39
acres "for the erection thereon of a building" or on which a building has already
been erected to be used for such purposes. The subsection is quite restrictive.
The phrase "otherwise than by will" only applies as regards the exclusion of
section 2 since section 6 cannot possibly apply to a will. This phrase thus has the
effect of continuing the requirement, in the case of an incorporated society of
the type described, to obtain a licence in mortmain (where it is otherwise
required to do so) where land is devised to it by will.
Since a charity can make application to the Court for an order sanctioning
the retention of land required for its actual occupation, whether the land be
more or less than two acres, we are of the opinion that section 9(b) is redundant
and should be repealed.
As regards religious societies to which reference is made in section 9(b),
there is no question but that the Act applies to all religious societies since they
represent one of the heads of charity. Religious societies governed by The Reli-
gious Institutions Act,16 however, have wide powers under that Act to acquire
and hold land which override The Mortmain and Charitable Uses Act. If our
recommendation to extend The Religious Institutions Act to all bona fide
religious societies77 is adopted, the provisions of The Mortmain and Charitable
Uses Act will be of limited application to such societies. It is not clear, however,
to what extent The Religious Institutions Act empowers religious societies to
acquire and hold land. It is probable that it contemplates only acquisitions for
valuable consideration, in which case gifts inter vivos and devises are subject to
The Mortmain and Charitable Uses Act, including the exemption in section 9(b)
which widens the powers of religious societies. It should be noted that section
9(b) does not restrict the right of a religious society to acquire by purchase and
to hold more than two acres of land for its purposes under Jlie Religious
Institutions Act. It is only when such land is not required for the purposes of the
religious society, that The Mortmain and Charitable Uses Act becomes effective
with respect to it. The extent of the interaction between the two statutes should
be clarified by appropriate provisions in The Religious Institutions Act.
6. The Effect of Section 1 5
A peculiar problem presents itself with the last section of The Mortmain
and Charitable Uses Act, section 15. It reads:
Nothing in this Act applies so as to limit or restrict the right pos-
sessed by any corporation under any other Act, or affect any charter or
licence in force when this Act comes into force enabling land to be assured
or held in mortmain.
The original provision in the Act of 190278 read:
Nothing in this Act shall affect the operation or validity of any
charter or licence in force at the passing of this Act enabling land to be
assured or held in mortmain.
The first part of the present section 15 was added in 1909 and the two parts
separated by a comma. As a result it has been suggested to us in a submission
that the saving effect of section 1 5 extends only to a charter or licence in force
76R.S.O. 1970, c. 411.
77 Infra, chapter 6.
78S.O. 1902, c. 2, s. 11.
40
when the Act came into force, that is March 13, 1902, not to any issued
thereafter. The effect of the section, therefore, is to require a corporation with
charitable objects incorporated or obtaining a licence after that date to comply
with the charitable uses provisions of the Act.79 It is questionable whether
corporations operating under a charter or licence issued before that date or
under another Act are exempt from those provisions since the section only
speaks of a right conferred by such charter, licence or Act enabling land to be
assured or held in mortmain; no reference is made to charitable uses. It is thus
arguable that charters or licences predating March 13, 1902, are either not
subject to the mortmain provisions of the Act, or that they are subject thereto
and that the section merely continued their operation and validity for the time
being. Clearly any provision in a special Act permitting land to be held in
mortmain, indeed, without restriction on the length of time it may be held,
would override The Mortmain and Charitable Uses Act. The section requires
clarification. We recommend that the section be amended to provide that
nothing in the Act has the effect of limiting or restricting the right of any corpo-
ration under any other Act, or under any charter or licence enabling land to be
assured or held in mortmain.
7. Breach of Oiari table Trust
There is a somewhat unusual section in The Mortmain and Charitable Uses
Act which derives from an Imperial statute.80 Section 14 of the present Act
provides that two or more persons may present a petition of complaint of a
breach of charitable trust to the Supreme Court. The petition must be signed by
them in the presence of and be attested by their solicitor. Before the complaint
can be prosecuted, the Attorney General must certify the petition. Although the
section itself is quaint, its purpose is not. It is appropriate that the public be
given an opportunity for monitoring charitable (that is public) trusts. The Mort-
main and Charitable Uses Act is no longer the appropriate place for such a
provision, however. A more suitable statute is The Charities Accounting Act81
which was first enacted in 19 1582 for the purpose of monitoring charitable
trusts. The provisions of section 14 of The Mortmain and Charitable Uses Act
might be suitably recast in a form similar to that of section 6 of The Charities
Accounting Act which provides a procedure for members of the public to make
complaints as to the manner in which funds have been solicited and collected
from the public. The revised provision should then be incorporated into the
latter Act.
8. Conclusions
It is apparent from the foregoing that The Mortmain and Charitable Uses
Act is an illogical collection of the statutory flotsam and jetsam of the past
several hundred years. In our view, repeal of the Act and its replacement, if that
79 See Re Hagerman, (1918), 13 O.W.N. 406. The law in England was the same, see
Jarman, A Treatise on Wills (8th ed., 1951), vol. 1, p. 273; Mogg v. Hodges (1750), 2
Ves. Sen. 52, 28 E.R. 35; British Museum v. White (1826), 2 Sim. & St. 594, 57 E.R.
473; Luckraft v. Pridham (1877), 6 Ch. D. 205 (C.A.). No change was effected by the
English Acts of 1 888 and 1 89 1 ; see In re Verrall, National Trust for Places of Historic
Interest or Natural Beauty v. Attorney General, [1916] 1 Ch. 1 00.
80 An Act to Provide a Summary Remedy in Cases of Abuses of Trusts Created for
Charitable Purposes, 52 Geo. 3, c. 101 (1812).
81R.S.O. 1970, c. 63.
82S.O. 1915, c. 23.
41
is thought desirable, by simpler legislation would be appropriate and we have
made recommendations to that effect in the preceding chapter. However, we
have made a number of specific recommendations in this chapter for the amend-
ment of the existing legislation in the event that it is thought necessary to retain
it.
RECOMMENDATIONS
In the event that The Mortmain and Charitable Uses Act is to be retained,
contrary to our recommendation, the Commission makes the following recom-
mendations:
1. The legislation should be amended to remove the existing discre-
pancy between the definitions of "assurance" and "land".
2. The legislation should not apply to leases of seven or fewer years in
duration. The definition of "assurance" set out in section 1(1 )(a) of
the Act, so far as it applies to leases, should be amended to include
only leases that may last for more than seven years, whether by
reason of the original term or by right of renewal or both.
3. The monitoring of corporations with charitable objects under a
general licence in mortmain as it is done at present under the regula-
tions should be transferred to The Charities Accounting Act .
4. Section 6 of the Act, concerning the validity of assurances made in
favour of a charity during the lifetime of the donor, should be
repealed because it no longer performs a useful function and because
its purpose is now largely superseded by section 7, which requires
any land assured to charitable uses to be sold within two years
unless its retention is approved by a judge of the Supreme Court.
5. The definition of "full and valuable consideration" should be
deleted from section l(l)(b) following upon the repeal of section 6.
6. The provisions respecting the acquisition of land, both inter vivos
and by will, and the holding of land by or for the benefit of chari-
table uses should be amalgamated, and no distinction should be
drawn between the methods of acquisition as regards the results that
flow therefrom.
7. The provision for automatic divestment in sections 7 and 10 should
be amended, having retrospective effect, with regard to any lands
which are not yet sold under the provisions of the Act so as to
enable applications to be made to the Court for the following pur-
poses:
(a) to permit retention by or on behalf of the charity;
(b) to revest the land in the charity and to permit its retention;
and
(c) to grant an extension of time for sale.
The amendments should permit applications to be made to the
Court by or on behalf of a charity before actual divestment occurs,
and also should permit applications to be made to the Court either
by or on behalf of the charity, or by the Public Trustee after divest-
ment has occurred, but prior to the land being sold.
42
8. The time period during which land assured to charitable uses must
be sold should be increased from two to three years.
9. The court should be empowered to grant an extension of time for
sale for such period or periods and upon such grounds as it sees fit.
The grounds for an order permitting retention of land by a charity
should be broadened to include the case of land acquired for its
future expansion.
10. The Act should be amended in its general application to require a
sale within three years commencing after the land ceases to be
actually used by a charity, failing which it shall be divested. Sec-
tions 8(3) and 13(3) which make provision for certain special cases
should be similarly amended.
1 1 . The Act should be amended in its general application to provide:
(a) that the Court may, by order, permit the acquisition or reten-
tion of land by a charity for future occupation during a five-
year period from the date of such order; and
(b) that the Court may, from time to time, grant further extension
orders in appropriate cases.
Sections 8(3) and 13(3) which make provision for certain special
cases should be similarly amended.
12. The Act should provide that in all cases where an assurance for
charitable uses is subject to any prior interest (for example, a lease)
the period within which the land must be sold shall commence from
the termination of the prior interest.
13. Section 13 of the Act providing for an exemption in favour of
specified public bodies should be retained, but the phrase "trustees
empowered to administer or hold property for charitable uses" in
subsection (1) should be deleted and replaced with the phrase
"similar public bodies or their trustees".
14. Consideration should be given to the question whether the present
exemptions from the provisions of the Act are justifiable, whether
further exemptions should be made, and if so, on what criteria.
15. The exemptions should be divided into two groups, those that are
exempt from the mortmain provisions and those that are exempt
from the charitable uses provisions.
16. No distinction should be drawn in the exemptions between land
acquired inter vivos or by will.
17. Section 9(a) which sets out exemptions for certain educational
institutions should be incorporated into the general exemptions
listed in section 8(2). Section 8(3) should be made to apply to them,
so that such educational institutions will at least be entitled to retain
land required for their actual use and occupation, without the per-
mission of the Court.
18. Section 9(b) is redundant in that an application can be made for
retention of less or more than two acres. We therefore recommend
its repeal.
43
19. The Religious Institutions Act should define when and to what
extent land acquired and held under that Act becomes subject to
The Mortmain and Charitable Uses Act.
20. Section 14 of the Act which deals with the procedure to be followed
in cases of breach of charitable trust or where direction is sought
with regard to the administration of the trust should be recast in a
form similar to that of section 6 of The Charities Accounting Act
and be incorporated into that Act.
21. Section 15 of The Mortmain and Charitable Uses Act should be
amended to make it clear that nothing in the Act has the effect of
limiting or restricting the right of any corporation under any other
Act or under any charter or licence enabling land to be assured or
held in mortmain.
CHAPTER 5
HISTORY OF THE RELIGIOUS
INSTITUTIONS ACT
1 . History in Ontario
The Religious Institutions Act1 is primarily a conveyancing statute and
was originally conceived as such. It is strictly an Ontario statute that does not
have its roots in English legislation, although there was comparable English
legislation.2 It is, however, closely related to the legislation on mortmain and
charitable uses and cannot be thought of in isolation from such legislation. This
is apparent from the history of the Act.
Following the United Empire Loyalist influx from the United States which
gave impetus to the settlement of what is now Ontario and which saw the
establishment of many different churches, it became necessary to make provi-
sion for the holding of land for the purposes of such churches. Thus in 1828 the
first piece of legislation in Upper Canada respecting the holding of land by
religious societies was passed.3 The Act recited:
WHEREAS religious societies of various denominations of Christians find
difficulty in securing the title of land requisite for the site of a church,
meeting-house or chapel, or burying-ground, for want of a corporate
capacity to take and hold the same in perpetual succession,
relief ought to be provided for such societies.
The form of the relief consisted of authorizing such societies to take land
by conveyance for any of the uses recited in the name of trustees who, with
their successors in perpetual succession, were enabled to hold the land. The Act
was restricted in its application to Presbyterians, Lutherans, Calvinists, Metho-
dists, Congregationalists, Independants, Anabaptists, Quakers, Menonists,
Tunkers and Moravians.4 A limit of five acres per congregation was also imposed
by the Act.5
The Church of England was not named as one of the religious societies
requiring relief because it was regarded, in some quarters at least, as the esta-
blished church. In truth, it was probably intended to be so and the provisions of
the Constitutional Act6 arguably conferred limited establishment upon that
church with the status of a body corporate under the state and provision to hold
land under the terms of the statute.7
^.S.O. 1970, c. 411.
2 Gifts for Churches Act, 43 Geo. 3, c. 108 (1803); Places of Worship Sites Act, 36 &
37 Vict, c. 50 (1873); Roman Catholic Charities Act, 23 & 24 Vict, c. 134 (1860);
and amendments thereto.
3 An Act passed for the relief of the Religious Societies therein mentioned, 9 Geo. 4, c.
2.
*Ibid.,s. 1.
5 Ibid., s. 2.
6 31 Geo. 3, c. 31, (U.K., 1791), ss. 36 ff.
7Moir, Church and State in Canada, 1627-1867 (Carle ton Library, 1967), p. 154. This
is not the place to discuss this controversy. The basic documents are set out in
extenso by Moir. See also: Talman, "The Position of the Church of England in Upper
Canada", Canadian Historical Review, vol. XV (1934), p. 361, repr. in Johnson, ed.,
Historical Essays on Upper Canada (Carle ton Library, 1975), p. 58; Young, "A
Fallacy in Canadian History", Canadian Historical Review, vol. XV (1934), p. 351;
Wilson, The Clergy Reserves of Upper Canada: A Canadian Mortmain (Toronto,
1968).
[45]
46
The effect of the Act was two-fold. In the first place, it avoided the
provisions of the English Mortmain Act of 17368 which, would have prevented
the acquisition and holding of land by such religious societies except in accor-
dance with its onerous terms. Secondly, the Act established such religious socie-
ties as quasi-corporations for the purpose of holding land, by granting their
trustees perpetual succession. The latter effect of the Act was later confirmed
judicially9 and it is this aspect of the legislation that is still of particular signifi-
cance today.
An amending Act in 1841 10 repealed the restriction on the five-acre
holdings, extended the purposes for which land could be held to "the support of
public worship and the propagation of Christian knowledge", and extended the
rights and privileges conferred by the Act "to the Roman Catholic Church, to be
exercised according to the government of the said Church". It is not clear why
the Roman Catholic Church was omitted from the 1828 Act. The reason may be
that this church was recognized in Lower Canada by the British Government in
1817 in the person of the "Bishop of the Roman Catholic Church of Quebec"
whose see extended to Upper Canada.11 Another reason may be that the colony
simply followed England in this respect, since it had recently granted the same
rights to this church that were enjoyed by Protestant Dissenters.12
A somewhat similar situation applied in the case of the Church of England.
Having lost the battle for establishment in fact, as well as in law, provision was
made for its government and the administration of its property by the Church
Temporalities Act.13
An Act in 184514 extended the Act of 1828 to "any Religious Society or
Congregation of Christians", thereby for the first time making the legislation
applicable to virtually all organized religious groups in Upper Canada at that
time.
A series of subsequent statutes gave further specific powers to religious
societies. In addition to several provisions for the registration of deeds, these
included powers of sale, a power to mortgage, a power to lease and a power to
appoint successor trustees.
All of this legislation was consolidated and revised in 1873 by An Act
respecting the property of Religious Institutions in the Province of Ontario.15
This Act is essentially the same as the legislation currently in force. It included
for the first time also a provision similar to the present section 14 enabling two
or more religious societies to build jointly a house for public worship. In addi-
8 9 Geo. 2, c. 36 (1736). Whether that Act applied to Upper Canada at that time
was probably not considered in 1828 but was decided affirmatively almost twenty
years later: see Doe d. Anderson v. Todd (1846), 2 U.C.Q.B. 82.
9 Humphreys v. Hunter (1870), 20 U.C.C.P. 56; The Trustees of the Toronto Berkeley
Street Congregation of the Wesley an Methodist Church in Canada in Connection with
the English Conference v. Stevens (1875), 37 U.C.Q.B. 9; The Trustees of the
Franklin Church v. Maguire (1876), 23 Gr. 102; Re Wansley and Brown (1891), 21
O.R. 34;Beatty v. Gregory (1897), 24 O.A.R. 325.
10 3 Vict., c. 73.
11 Moir, supra footnote 7, at page 136.
"Roman Catholic Charities Act, 2 & 3 Will. 4, c. 115 (1832).
13 3 Vict., c. 74(1841).
14 8 Vict., c. 15(1845).
ls36Vict., c. 135(1873).
47
tion, the Act contained a specific mortmain provision, copied from similar provi-
sions contained in private Acts respecting several denominations. This section16
permitted the acquisition of land by gift, devise or bequest if it was made at least
six months before the death of the donor. The annual value of all lands so
acquired could not exceed $1,000 and such lands had to be sold within seven
years of acquisition. Failure to do so would result in an automatic reverter to the
donor. The requirement of sale was amended in the revision of 188717 to apply
only to such lands that were not used for any purpose mentioned in section 1 of
the Act, that is the enumerated purposes for which land could be acquired by a
religious society. While the section is comparable to that contained in private
Acts and is not unusual, having regard to the fact that it was judicially held some
years earlier that the Statutes of Mortmain applied to Upper Canada,18 earlier
legislation appears to have contemplated that land could be acquired by gift by
religious societies without the necessity of immediate sale.19 The section was
dropped from the Act in the 1912 revision,20 the reason being that it was
thought to have been superseded by the more generous provisions of The
Mortmain and Charitable Uses Act, 1892.2i
An amendment in 187822 extended the provisions of the Act for the first
time to the Church of England. This enactment is the forerunner of the present
section 19. It was subsequently amended on several occasions.
An amendment to the Act in 188223 made provision for joint trustees for
adjoining burial grounds: the present section 18.
In 189024 the Act was extended to "any religious society or congregation
of Jews, professing the Jewish religion".25 In 1904 special provisions were
included for the Methodist Church26 which were in turn superseded in 1925 by
The United Church of Canada Act.21
Meanwhile, as noted above, the Act went through a major revision in
1912.28 Except for minor amendments, there have been no further revisions.
16 Ibid., s. 20.
17R.S.O. 1887, c. 237, s. 23. Presumably the amendment was made to give effect to the
original intent of the section, but there is no authority to be found for the amend-
ment.
18 Supra, footnote 8.
,9See, e.g., 12 Vict., c. 91 (1849), s. 2 (power of sale and lease), and 18 Vict., c. 119
(1855), preamble (ibid.).
20 The Religious Institutions Act, S.O. 1912, c. 81.
21 55 Vict, c. 20. See Re Barrett (1905), 10 O.L.R. 337, 339; Snider, Annotations to
the Revised Statutes of Ontario 1914, p. 1231; Note, "Religious Institutions Act"
(1912), 48 Can. L.J. (N.S.) 406; Records of the Statute Law Revision Council,
1 890-1 91 2 (Ont.), vol. 8, pp. 5139-50, 5945. Cf the similar effect of the 1892 Act
on similar provisions in private Acts: Madill v. McConnell (1907), 16 O.L.R. 314,
318, per Boyd, C, 323-5, per Anglin, J. (Div. Ct.), affd. (1908), 17 O.L.R. 209
(C.A.).
2241 Vict., c. 25(1878).
2345 Vict.,c. 31 (1882).
24 53 Vict., c. 74(1890).
"This amendment also had its precedent in English legislation, the Religious Disabili-
ties Act, 9& 10 Vict., c. 59(1846), s. 2.
26 By 4 Edw. 7, c. 36(1904).
27S.O. 1925, c. 125, s. 34.
28 Supra, footnote 20.
48
2. The Operation of the Act
In summary, The Religious Institutions Act is designed to simplify the
method whereby a religious society may hold land for the purposes set out in
the Act. It does this by permitting the society to appoint trustees to hold land in
perpetual succession, without the necessity of recording a deed or transfer when-
ever a change occurs in the body of trustees, thereby constituting the trustees a
quasi-corporation. All other unincorporated organizations that hold land do so
by virtue of The Trustee Act29 and they are subject to the inconvenience of
having to record a new deed or transfer, each time there is a change in their
trustees.
3. Legislation in Other Provinces
Most of the other provinces have very similar types of legislation.30 In
some cases the legislation provides not only for this system of owning land31 but
also for incorporation of religious societies if they so wish.32 The latter object is
achieved in Ontario by the comparable provisions of Part III of The Corpora-
tions Act33 which are open to all non-profit organizations, including religious
ones. Some of the Acts make specific reference to particular denominations;34
most do not. It should also be noted that some of the Acts limit the amount of
land that may be held by a religious society.35
29R.S.O. 1970, c. 470. The Religious Institutions Act by implication excludes the
provisions of The Trustee Act respecting the appointment of trustees: Re Lutheran
Church of Hamilton (1915), 34 O.L.R. 228.
30The Religious Societies' Lands Act, R.S.A. 1970, c. 319, as am. by S.A. 1971, c. 70,
S.A. 1973, cc. 13, 61; Religious Institutions Act, R.S.B.C. 1960, c. 337; The Reli-
gious Societies' Lands Act, R.S.M. 1970, c. R70; Religious Congregations and
Societies Act, R.S.N.S. 1967, c. 268, as am. by S.N.S. 1970, c. 66; Religious Congre-
gations Lands Act, R.S.Q. 1964, c. 306, as am. by S.Q. 1973, c. 38, s. 121; The
Religious Societies Land Act, R.S.S. 1955, c. 116.
31 For Nova Scotia see also Religious and Charitable Corporations Property Act,
R.S.N.S. 1967, c. 267, which confirms titles to land of such corporations.
32 See: the Alberta Act, supra, footnote 30, ss. 13 ff.; Church Incorporation Act, R.S.Q.
1964, c. 305, as am. by S.Q. 1973, c. 72.
33R.S.O. 1970, c. 89.
34 See: the Alberta Act, supra, footnote 30, s. 12 (special provision for the Presbyterian
Church in Canada); the Nova Scotia Act, ibid., s. 17 (Act does not apply to The
Church of England Act); the Quebec Church Incorporation Act, supra, footnote 32,
s. 1 3 (Act does not apply to the Church of England in Canada or the United Church of
Canada); the Quebec Religious Congregations Lands Act, supra, footnote 30, s. 11
(general provisions of Act do not apply to Church of England).
3sSee: the Alberta Act, supra, footnote 30, s. 2(4) (320 acres); the Manitoba Act, ibid.,
s. 3(1) (300 acres for the site of all specified purposes, except a cemetery; 20 acres
for a cemetery); the Nova Scotia Act, ibid., s. 4 (not exceeding the yearly value of
$8,000); the Quebec Religious Congregations Lands Act, ibid., s. 9 (1 arpent within
the walls of the cities of Quebec and Montreal, 8 arpents outside the walls of those
cities but within their boundaries, 200 English acres elsewhere; the Saskatchewan
Act, ibid., s. 2 (320 acres).
CHAPTER 6 CONTINUING UTILITY OF THE
RELIGIOUS INSTITUTIONS ACT
1 . Introduction
The Religious Institutions Act1 was, as we have seen, an Act originally
designed to permit religious societies to acquire and hold land for places of
public worship and related uses in a convenient way. As such it continues to be
of great utility, particularly for smaller denominations. Many religious societies,
especially the larger denominations, have been incorporated under special Acts
which make provision for the acquisition and holding of land. That method of
incorporation is often too expensive or inconvenient for small denominations,
however. Similarly, the incorporation procedure open to non-profit organiza-
tions under Part III of The Corporations Act2 is often inappropriate for many
religious societies by reason of their form of church government or otherwise.
The main advantage of The Religious Institutions Act to religious societies is
that it confers on their trustees the benefit of perpetual succession. But for the
Act, these societies would be treated in law like any other unincorporated
association. In that event they could hold land only through individual trustees
whose appointment, tenure and powers would be governed by the more onerous
provisions of The Trustee Act. 3
Furthermore, the Act is of benefit not only to the smaller religious socie-
ties. Some of the larger denominations make use of it either directly or
indirectly. Thus, for example, many titles to land in the Anglican Church of
Canada are held under the provisions of the Act.4 Even churches that are incor-
porated by special legislation usually obtain the benefit of the Act as far as it is
not inconsistent with their own. The Act makes provision for this in section 17,
which provides that the Act shall not affect the provisions of any special Acts,
but shall be construed as supplementary thereto, and some denominations
happily take advantage of this provision in their special Acts.5
In our opinion, the Act generally works well to facilitate the holding of
land by religious societies; its general thrust should be retained.
The Religious Institutions Act in its present form, however, is a patchwork
quilt of ad hoc legislation some of which dates back to the original Act of
1828.6 A general revision of the Act is appropriate at this time. Therefore,
rather than dealing with the Act section by section the Commission has prepared
a draft Bill which is annexed to this Report as Appendix A. The proposed draft
attempts to consolidate those provisions of the Act that should be retained; it
incorporates changes, deletes obsolete or redundant provisions, and reorganizes
and modernizes its form.
In the following parts of this chapter we propose to discuss only the major
defects of the existing Act and to make specific recommendations for changes to
correct them.
'R.S.O. 1970, c. 411.
2R.S.O. 1970, c. 89.
3R.S.O. 1970, c. 470.
4 Pursuant to s. 19.
5 See, e.g., The United Church of Canada Act, S.O. 1925, c. 125, s. 25, which provides
that the provisions of any general Act respecting the property of religious societies
shall be construed as supplementary to that Act when not inconsistent therewith.
6S.U.C. 1828, c. 2.
[491
50
2. Extension to Other Religious Societies
The Act in express terms applies only to religious societies of Christians
and, since 1890, Jews. This restriction, while no doubt suitable when enacted in
that there was no need at that time to make provision for other organized
religious faiths, is discriminatory and therefore inappropriate in today's plural-
istic society in which a large segment within the population professes religious
beliefs other than those of the Judaeo-Christian tradition. We believe the Act
should be amended to recognize contemporary social conditions.
In this context we may usefully quote from a statute passed in 1852 as
part of the process to disendow the Church of England in Canada. The Act7
prohibited the creation of further rectories for that church, but in its preamble
and first section it recited and enacted:
WHEREAS the recognition of legal equality among all religious
denominations is an admitted principle of Colonial legislation; And where-
as, in the state and condition of this Province, to which such principle is
peculiarly applicable, it is desirable that the same should receive the sanc-
tion of direct legislative authority, recognizing and declaring the same as a
fundamental principle of the civil policy of this Province:
Therefore Her Majesty, by and with the advice and consent of the
Legislative Assembly of the Province of Ontario, enacts as follows: —
1 . The free exercise and enjoyment of religious profession and worship,
without discrimination or preference, provided the same be not made an
excuse for acts of licentiousness or a justification of practices inconsistent
with the peace and safety of the Province, is by the constitution and laws
of this Province assured to all Her Majesty's subjects within the same.8
Since the object of The Religious Institutions Act is primarily to render
conveyancing by unincorporated religious societies more convenient, it could be
argued that all organizations that espouse religious beliefs, ought to be given the
benefit of the Act. This has been done in two Canadian jurisdictions. Thus the
Manitoba Act9 defines "religious society" as "a church, congregation, or other
religious society of persons professing or adhering to a religion or religious
faith".10 The Alberta Act formerly applied only to religious societies or denomi-
nations of Christians.11 By a recent amendment,12 however, the reference to
Christianity was deleted.
In our opinion, however, the approaches adopted in the legislation in
Manitoba and Alberta are so broad in their definition and application as to
create considerable difficulties. In the first place, the Act has always been
intended to be restricted to organizations that are in fact constituted for the
advancement of religion, one of the heads of charity. In this respect such organi-
zations are given preferential treatment over and above that accorded to other
1 An Act respecting Rectories, S.C. 1852, c. 175.
8 The Act was last consolidated in R.S.O. 1897, c. 306, from which the quotation was
taken. It stands unrepealed.
9 The Religious Societies' Lands Act, R.S.M. 1970, c. R70.
"Ibid., s. 2(l)(c).
11 The Religious Societies' Lands Act, R.S.A. 1970, c. 319, s. 2(1), as am. by S.A. 1971,
c. 70, s. 10.
12S.A. 1973, c. 61, s. 17.
51
charities. The reasons for this are historical and practical. Other organizations as
a practical matter can more readily be incorporated. The Act should not, there-
fore, be extended to include other charitable purposes except to the extent that
they are ancillary to the religious objects of religious societies. In the second
place, it may be questioned whether all organizations that profess to be religious
societies can in fact be classified as such. Some may not be exclusively religious
but charitable in other respects. Others may not be charitable at all, in that part
or all of their objects are non-charitable in law (although their work may be of
benefit to society).13 It does not seem appropriate to grant such organizations
the right to hold land in perpetual succession in light of the historical purpose of
the legislation. Finally, there are some organizations which profess to support
religious beliefs but which may enjoy only a short life-span. Again, it seems
unwise to accord such organizations the benefit of the Act until they are reason-
ably established.
On the other hand, representations were made to the Commission that the
object of the Act as currently defined is too narrow in that it is confined to
congregations, and in some cases to other subdivisions or affiliated parts of
denominations. The Commission agrees that the Act is unduly restrictive in this
respect, having regard to the fact that much real estate is held on a denomina-
tional level, rather than by the local congregations, often simply to achieve
economies of scale. There is no reason to withhold the convenience of this
system of land-holding from the denomination or a subdivision thereof, or their
governing bodies.
The term "religious society" like "religion" itself defies precise legal
definition. Some assistance in prescribing the applicability of the Act however is
necessary. The definition of "religious society" in the draft Bill has been
prepared in light of the foregoing considerations:
'religious society' means a society, congregation, church, denomination or
subdivision of a denomination, and includes the governing body of any of
the foregoing, which is charitable according to the law of Ontario, and
(i) whose purpose is the advancement of religion,
(ii) which has an established body of religious beliefs, rituals and prac-
tices, and
(hi) which is permanently established, both as to the continuity of its
existence and as to its religious beliefs, rituals and practices. (S.I.-
(0(b).)
For historical reasons the Act applies typically to religious societies
organized along congregational lines. Many churches organized hierarchically
may thus have difficulty in taking advantage of the Act. To remedy this defect
we recommend the enactment of the following section in the draft Bill:
Where, under the constitution, customs or practices of a religious society,
its property is vested in one person, such person shall be deemed to be a
trustee by whom like powers of trustees under this Act may be exercised
as in the case of such trustees. (S.2.)
13 For example, it has been held that a masonic lodge does not satisfy the test of
"advancement of religion". See United Grand Lpdge of Ancient Free and Accepted
Masons of England and Wales v.Holborn Borough Council, [1957] 1 W.L.R. 1080.
52
3 . Method of A cquiring Land
The original Act of 182814 appears to have been drafted with the view that
religious societies could take land only by deed; presumably either by gift or by
purchase. As indicated above,15 subsequent legislation appears to have contem-
plated the acquisition of land by devise as well, and this was confirmed by a later
provision in the Act,16 which permitted such acquisition by gift, devise or
bequest, and which in turn was repealed in 1912.17 The effect of that repeal was
to make gifts and devises to religious societies subject to the two-year sale
provision of The Mortmain and Charitable Uses Act18 whether or not the land
might be used for any of the purposes enumerated in The Religious Institutions
Act. In our opinion a religious society should be able to acquire land by gift,
conveyance, devise or otherwise for any of the purposes that the Act permits.
Only if any land, however acquired, is not or is no longer necessary for such
purposes should it, subject to the power to lease, become subject to The Mort-
main and Charitable Uses Act if that Act is to be retained. To this end, we
recommend the enactment of the following:
A religious society may, in the name of trustees, acquire land by gift,
conveyance, devise or otherwise, and may hold and possess land so
acquired for the benefit of the society for, [certain specified purposes
discussed in the following section] . (S.5.-(l).)
4. Purposes for which Land may be Held
The purposes for which a religious society may currently acquire land are
set out in section 1(1) of the Act. These are: "the site of a church, chapel,
meeting-house, burial ground, residence for a minister, book store, printing or
publishing office or . . . any other religious or congregational purpose".
We propose the following revised list of purposes:
(a) a place of worship ;
(b) a residence for its minister or other religious leader;
(c) a burial ground;
(d) a book store, printing or publishing office;
(e) a theological seminary or similar institution of religious instruction;
(f) any other religious purpose of the society. (S.5.-(l).)
As can be seen, we have not recommended any major changes in these purposes,
except to expand the wording to include terms used by faiths other than those
of the Christian religion, and to include a reference to a theological seminary or
similar institution of religious instruction which is an appropriate addition
having regard to the general purpose of the Act.
5. The Power to Lease
The present power to lease contained in section 6 of the Act is ambiguous
and uncertain in its operation. It provides for an initial term not exceeding 21
14 Supra, footnote 6.
15 Chapter 5, footnote 19.
16 Ibid., footnote 16.
11 Ibid., footnote 20.
18Currently R.S.O. 1970, c. 280, as am. by S.O. 1972, c. 85.
53
years with a right of renewal for a further term of 21 years. The power to renew
is open to two interpretations. The section may be interpreted to allow trustees
to covenant for the renewal of a lease in perpetuity, or it may mean that land
can only be leased for a maximum period of 42 years, so that the land should
thereafter be sold under the provisions of The Mortmain and Charitable Uses
Act. In our opinion the latter interpretation more closely reflects the original
intent of section 6. We consider that section 6 should be amended to provide
merely that a religious society may lease its land for an aggregate period not
exceeding 40 years. We are not in a position to comment upon the suitability of
the present 42 year period; this issue involves the more general policy issue of
whether charities should be able to invest in land which we referred to earlier.19
We are reluctant to alter the policy of the Act in this regard; however we do
recommend the adoption of a 40 year period rather than the present 42 year
period. There is no particular justification for retaining the present 42 year
period; a 40 year period would at least accord with the period stipulated in The
Registry Act for the investigation of titles. We so recommend:
The trustees of a religious society may lease for one term of forty years or
for more than one term of not more than forty years in all, any land held
by them for the benefit of the society which is no longer required by it for
any of the purposes enumerated in section 5, at such rent and upon such
terms and conditions as they consider expedient. (S.14.-(l).)
In the event that the provisions of The Mortmain and Charitable Uses Act
restricting investment in land by charities are not retained, there would be no
further need to restrict the maximum period and the section should be amended
accordingly. On the other hand, if those provisions are to be retained the land
should become subject to them at the expiration of the 40 year maximum term
or terms.
6. Power to Sell
The present powers of sale are contained in sections 7, 8 and 12 of the
Act. They are unnecessarily complicated and should be simplified in the manner
proposed in the draft Bill:
The trustees of a religious society may upon such terms and conditions as
the society may by resolution approve sell or exchange at any time land
held by them if the society has by resolution determined that the land is
no longer necessary for its purposes. (S.15.-(l).)
Again, the draft Bill is explicit in applying The Mortmain and Charitable Uses
Act to land no longer required by a religious society, assuming that Act is to be
retained.20 The original intent of the powers of sale was probably to require a
sale within a reasonable time. The draft Bill places a reasonable time limit on the
period. The provisions of the draft Bill would have the effect of making the
proposed three year sale provision under The Mortmain and Charitable Uses Act
applicable.21
7. Joint Trustees
The present Act makes provision for land being held by joint trustees for
different religious societies in two distinct cases, first where they desire to build
19 See supra Chapter 3, at p. 19.
20 We have recommended otherwise, supra, p. 23.
21 See supra, Chapter 4, at p. 37.
54
a joint house of worship22 and second, in the case of adjoining burial grounds.23
Since churches and religious societies today often undertake joint projects
in addition to these two, such as the construction and operation of homes for
the aged, we consider that this power should extend to all purposes which the
Act permits:
Each of two or more religious societies may by resolution appoint joint
trustees and provide for the appointment of their successors and may enter
into agreements respecting the holding of land for their joint benefit by
such joint trustees for any of the purposes enumerated in section 5 and all
the provisions of this Act apply mutatis mutandis to such joint trustees.
(S.18.-0).)
8. Applications to Court
There may be occasions in which land is vested in trustees, but the reli-
gious society for which they hold it has ceased to exist, or in which the society
has ceased to exist and all the trustees have died, resigned or disappeared. In
such cases interested persons or the Public Trustee should have the opportunity
to apply to the court to resolve what is to be done with the land. We do not
think it proper that the court on such a summary application should have
jurisdiction to resolve disputes between members of a body of trustees or of a
religious society particularly where they are equally divided.
Similarly, and having regard to the fact that we have recommended that
the Act should be extended to many other religious societies than those that
qualify at present, questions may arise as to the applicability of the Act. Again,
provision for summary application to the court to resolve the matter, with
notice in appropriate cases to the Public Trustee, should be made.
Our recommendations on this point are set out in the draft Bill as follows:
19.— (1) Where a religious society has ceased to exist, or where the authori-
zation required under section 1 1 cannot be obtained for any reason other
than a dispute among the members of the society concerning the society's
property, the persons in whom the land of the society is vested as trustees or,
upon their failure to do so or where no trustees remain in office, any inter-
ested person or the Public Trustee may apply in a summary way to the
Supreme Court or to the county or district court of the county or district
in which the land or any part thereof is situate for directions, and the court
may authorize the trustees or may appoint and authorize any other person
to exercise any of the powers conferred by this Act.
(2) Upon such an application the court may direct that the land or any
part thereof be disposed of or that it or the proceeds of sale thereof be dis-
tributed in such manner as it considers proper, and the court may make
such vesting orders as are expedient in the circumstances.
21.— (1) Any society or other organization that wishes to have determined
whether or not it is entitled to acquire, hold and possess land under this
Act may at any time apply in a summary way to the Supreme Court or to
the county or district court of the county or district in which the land in
question or any part thereof is situate, and the court may determine the
matter.
22 S. 14.
23 S. 18.
55
(2) In like manner the Public Trustee may apply to have determined
whether any society or other organization that purports to hold and
possess or that intends to acquire, hold and possess land under this Act is
entitled to do so.
9. Special Cases
The Act as currently drafted makes specific reference to three denomina-
tions, extending the provisions of the Act to them. These are the Anglican
Church of Canada, The Roman Catholic Church, and societies or congregations
of Jews professing the Jewish religion. Since we have recommended the exten-
sion of the Act to all bona fide religious societies as we have defined them, the
latter two provisions are superseded and can be repealed.
The provisions respecting the Anglican Church are in a different category.
They make a detailed and specific application of the Act to the Anglican
Church. The Commission is of the opinion that while historically a number of
religious societies were specifically referred to in the Act, with respect to the
application of the Act to their particular circumstances, it is not appropriate or
desirable that any society should be specifically named or that special provision
be made for any one society in a public statute. The provisions contained in the
present section 19 which modifies the applicability of the Act to the Anglican
Church in some degree should, therefore, be re-enacted as a separate statute and
the provisions of The Religious Institutions Act as revised made applicable there-
to. The re-enactment of section 19 should be by a Bill, introduced by the
Minister contemporaneously with the Bill to revise The Religious Institutions
Act so that the Anglican Church will not be required to bear the expense of
preserving the statutory rights it currently enjoys. A draft Bill is included as
Appendix B to this report.
10. Corporate Status for Trustees
Representations were made to the Commission suggesting that trustees for
religious societies should be constituted corporations outside the ambit of The
Corporations Act.24 In our opinion this would be undesirable. It is true that the
cases speak of trustees for religious societies as being quasi-corporations or
having corporate attributes25 and, in the case of the Anglican Church, the church
wardens (who together with the rector or incumbent are the trustees) are treated
"as a corporation".26 Furthermore, under The Land Titles Act the trustees are
treated as a corporate body in that that Act requires that "they shall be regis-
tered in their corporate name".27 In all these instances, however, there is refer-
ence only to some corporate attributes, in particular to the right of perpetual
succession and the right to use a collective name. These attributes are accorded
by the statute for ease of conveyancing and to permit the trustees to sue and be
sued in their collective name. In our view, there is no need to go beyond this.
Indeed, it is unwise to do so since complete corporate status may conflict with
the beliefs of some religions. In the event that a particular religious body wishes
to have itself or its trustees incorporated, the procedure of a private Act or the
24 Supra, footnote 2.
25 See cases noted supra, Chapter 5, footnote 9.
26 Church Temporalities Act, 3 Vict, c. 74 (1841). See Re Pountney and McBirney
(1927), 33 O.W.N. 84.
27R.S.O. 1970, c. 234, s. 71(1).
56
incorporation procedure for non-profit organizations under Part III of The
Corporations Act remain open to it.
1 1 . Conclusion
In conclusion we wish to point out that the underlying policy and purpose
of The Religious Institutions Act is sound and that the Act should, therefore, be
continued. Further, however, we would repeat that substantial extension and
amendment of the Act are warranted, the main provisions of which we have
outlined in this chapter, and all of which are contained in the draft Bill revising
the Act forming Appendix A to this Report.
CHAPTER 7
SUMMARY OF RECOMMENDATIONS
Chapter 3 POLICY CONSIDERATIONS WITH RESPECT TO THE MORTMAIN
AND CHARITABLE USES ACT.
1 . The mortmain provisions of The Mortmain and Charitable Uses Act
should be repealed in their entirety and, if thought to be desirable,
they should be replaced with a monitoring scheme that is integrated
with that in effect with respect to extra-provincial corporations.
2. If as a matter of government policy it is decided that a system of
controls on landholding by non-resident corporations and other enti-
ties is desirable (a matter which is outside the terms of this Refer-
ence) such a system should be established by new legislation, rather
than by a continuance and "shoring-up" of The Mortmain and
Charitable Uses Act.
3. If as a matter of government policy it is thought desirable to
continue to restrict direct investment in land by charities, the chari-
table uses provisions of the Act should be repealed and replaced with
new and simpler legislation to achieve that purpose. Such legislation
might either form a separate Act or be incorporated into The Chari-
table Gifts Act. A consolidation of The Charitable Gifts Act, The
Charities Accounting Act, and any retained sections related to
charitable uses of The Mortmain and Charitable Uses Act is
desirable.
4. The administration, regulation and monitoring of charities should be
reviewed by an appropriate body and legislation drafted requiring
regular disclosures by and publication of information concerning all
charities.
5. The following consequential amendments and repeals should be
made:
(a) The first sentence of section 4 of An Act Respecting Real
Property (Quia Emptores), R.S.O. 1897, c. 330 (R.S.O. 1970,
Appendix A) should be repealed.
(b) Section 43 of The Registry Act, R.S.O. 1970, c. 409, should
be repealed.
(c) Section 97 of The Land Titles Act, R.S.O. 1970, c. 234,
should be amended to exclude any reference to a licence in
mortmain.
6. Consideration should be given to the enactment of an amendment to
The Business Corporations Act similar to section 306 of The Corpor-
ations Act, requiring the sale of land within seven years after it is no
longer required for actual use of a corporation or for carrying on its
undertaking.
7. Provision should be made for the automatic revesting of land in
charities or their trustees, where the land has vested in the Public
Trustee but has not yet been sold by him. The provision should be
retroactive so as to apply to cases where the charity has disposed of
[57]
58
the land to a third party. Such a provison should be enacted whether
or not divestment provisions similar to the existing ones are to be
incorporated into any new legislation, thereby curing defective titles
at the date of the enactment.
Chapter 4 OPERATION AND SCOPE OF THE MORTMAIN AND CHARI-
TABLE USES ACT
In the event that The Mortmain and Charitable Uses Act is to be retained,
contrary to our recommendation, the Commission makes the following recom-
mendations:
8. The legislation should be amended to remove the existing discrep-
ancy between the definitions of "assurance" and "land".
9. The legislation should not apply to leases of seven or fewer years in
duration. The definition of "assurance" set out in section 1(1 )(a) of
the Act, so far as it applies to leases, should be amended to include
only leases that may last for more than seven years, whether by
reason of the original term or by right of renewal or both.
10. The monitoring of corporations with charitable objects under a
general licence in mortmain as it is done at present under the regula-
tions should be transferred to The Charities Accounting Act.
1 1. Section 6 of the Act, concerning the validity of assurances made in
favour of a charity during the lifetime of the donor, should be
repealed because it no longer performs a useful function and because
its purpose is now largely superseded by section 7, which requires
any land assured to charitable uses to be sold within two years,
unless its retention is approved by a judge of the Supreme Court.
12. The definition of "full and valuable consideration" should be
deleted from section 1(1 )(b) following upon the repeal of section 6.
13. The provisions respecting the acquisition of land, both inter vivos
and by will, and the holding of land by or for the benefit of chari-
table uses should be amalgamated, and no distinction should be
drawn between the methods of acquisition as regards the results that
flow therefrom.
14. The provision for automatic divestment in sections 7 and 10 should
be amended, having retrospective effect, with regard to any lands
which are not yet sold under the provisions of the Act so as to
enable applications to be made to the Court for the following
purposes:
(a) to permit retention by or on behalf of the charity;
(b) to revest the land in the charity and to permit its retention;
and
(c) to grant an extension of time for sale.
The amendments should permit applications to be made to the
Court by or on behalf of a charity before actual divestment occurs,
and also should permit applications to be made to the Court either
59
by or on behalf of the charity, or by the Public Trustee after divest-
ment has occurred, but prior to the land being sold.
15. The time period during which land assured to charitable uses must
be sold should be increased from two to three years.
16. The Court should be empowered to grant an extension of time for
sale for such period or periods and upon such grounds as it sees fit.
The grounds for an order permitting retention of land by a charity
should be broadened to include the case of land acquired for its
future expansion.
17. The Act should be amended in its general application to require a
sale within three years commencing after the land ceases to be
actually used by a charity, failing which it shall be divested. Sections
8(3) and 1 3(3) which make provision for certain special cases should
be similarly amended.
18. The Act should be amended in its general application to provide:
(a) that the Court may, by order, permit the acquisition or reten-
tion of land by a charity for future occupation during a five-
year period from the date of such order; and
(b) that the Court may, from time to time, grant further extension
orders in appropriate cases;
Sections 8(3) and 13(3) which make provision for certain special
cases should be similarly amended.
19. The Act should provide that in all cases where an assurance for
charitable uses is subject to any prior interest (for example, a lease)
the period within which the land must be sold shall commence from
the termination of the prior interest.
20. Section 13 of the Act providing for an exemption in favour of
specified public bodies should be retained, but the phrase "trustees
empowered to administer or hold property for charitable uses" in
subsection (1) should be deleted and replaced with the phrase
"similar public bodies or their trustees".
21. Consideration should be given to the question whether the present
exemptions from the provisions of the Act are justifiable, whether
further exemptions should be made, and if so, on what criteria.
22. The exemptions should be divided into two groups, those that are
exempt from the mortmain provisions and those that are exempt
from the charitable uses provisions.
23. No distinction should be drawn in the exemptions between land
acquired inter vivos or by will.
24. Section 9(a) which sets out exemptions for certain educational
institutions should be incorporated into the general exemptions
listed in section 8(2). Section 8(3) should be made to apply to them,
so that such educational institutions will at least be entitled to retain
land required for their actual use and occupation, without the per-
mission of the Court.
60
25. Section 9(b) is redundant in that an application can be made for
retention of less or more than two acres. We therefore recommend
its repeal.
26. The Religious Institutions Act should define when and to what
extent land acquired and held under that Act becomes subject to
The Mortmain and Charitable Uses Act.
27. Section 14 of the Act which deals with the procedure to be followed
in cases of breach of charitable trust or where direction is sought
with regard to the administration of the trust should be recast in a
form similar to that of section 6 of The Charities Accounting Act
and be incorporated into that Act.
28. Section 15 of The Mortmain and Charitable Uses Act should be
amended to make it clear that nothing in the Act has the effect of
limiting or restricting the right of any corporation under any other
Act or under any charter or licence enabling land to be assured or
held in mortmain.
Chapter 6 CONTINUING UTILITY OF THE RELIGIOUS INSTITUTIONS
ACT
29. The Religious Institutions Act, R.S.O. 1970, chapter 411, which
permits congregations of Christians and Jews to hold land in per-
petual succession by their trustees, should be replaced by new legis-
lation to the same effect applicable to religious societies generally.
The Commission's detailed recommendations, which include the sug-
gested repeal of some provisions, the amendment of others and the
use of more modern forms of expression, are embodied in a draft Bill
entitled The Religious Societies Act forming Appendix A to this
Report.
61
CONCLUSION
We were most fortunate in connection with our work on this Reference
that we were able to attract the services of Professor A. H. Oosterhoff of the
Faculty of Law, University of Western Ontario, who acted as Director of
Research for the project. We record our thanks to him not only for his initial
and valuable research paper but also for his willing and extremely competent
assistance throughout all stages of the work including the preparation of the
Report and the accompanying draft bill.
In addition we would wish to convey our thanks to the Public Trustee, the
officials of other government departments, and the representatives and counsel
of the several religious societies and other interested groups who assisted us
materially through oral discussions and their submitted briefs.
All of which is respectfully submitted.
H. ALLAN LEAL, Chairman
JAMES C. McRUER, Commissioner
RICHARD A. BELL, Commissioner
W. GIBSON GRAY, Commissioner
WILLIAM R. POOLE, Commissioner
February 27, 1976
APPENDIX A
Bill 00 197
The Religious Societies Act, 197
HER MAJESTY, by and with the advice and consent of the Legis-
lative Assembly of the Province of Ontario, enacts as follows:
l.-(l) In this Act, Interpre-
tation
(a) "meeting" means any meeting of the members of a
religious society or of the governing body of the society,
as the case may be, that has been called by notice in
accordance with section 4;
(b) "religious society" means a society, congregation,
church, denomination or subdivision of a denomination,
and includes the governing body of any of the foregoing,
which is charitable according to the law of Ontario, and
(i) whose purpose is the advancement of religion,
(ii) which has an established body of religious beliefs,
rituals and practices, and
(iii) which is permanently established, both as to the
continuity of its existence and as to its religious
beliefs, rituals and practices.
(c) "trustees" means the trustees appointed by a religious
society to acquire, hold and possess land for its benefit,
and includes their successors.
(2) In interpreting subclause i of clause b a purpose shall be consi- Idem,
dered as nonetheless charitable if activities that are not charitable s- l»(D(b)(i)
but are merely ancillary to a charitable purpose are carried on in
conjunction with the charitable purpose.
(3) Where a separate religious society is formed out of an existing Derivative
religious society, whether voluntarily or otherwise, and the new societies
society meets the requirements of clause b of subsection 1 except
subclause iii thereof, it shall nevertheless be considered to be a
religious society for the purposes of this Act. New
2. Where, under the constitution, customs or practices of a reli- Property
gious society, its property is vested in one person, such person shall ^SJ^L!?„
be deemed to be a trustee by whom like powers of trustees under
this Act may be exercised as in the case of such trustees. New
one person
3. A resolution respecting any of the purposes of this Act shall be Resolutions
taken as adopted if the majority of those present at the meeting
called for that purpose and entitled to vote thereat vote in favour of
the resolution. New
4.— (1) A notice calling a meeting of a religious society for any of Notice of
the purposes of this Act, meeting
(a) shall specify the purpose of the meeting; and
[63]
64
(b) shall be given in accordance with the constitution, prac-
tice or custom of the religious society.
Idem (2) Where the constitution, practice or custom of a religious
society has no provision respecting a notice calling a meeting for any
of the purposes of this Act, the minister or other religious leader of
the society shall, at an open service of worship of the society, give
notice of a proposed meeting at least once in each of the two weeks
immediately preceding the week in which the meeting is proposed to
be held. R.S.O. 1970, c. 41 1 , ss. 3(2); 8(2), amended.
Holding of
land for
religious
purposes
Change
of name
5.— (1) A religious society may, in the name of trustees, acquire
land by gift, conveyance, devise or otherwise, and may hold and
possess land so acquired for the benefit of the society for,
(a) a place of worship;
(b) a residence for its minister or other religious leader;
(c) a burial ground;
(d) a book store, printing or publishing office;
(e) a theological seminary or similar institution of religious
instruction;
if) any other religious purpose of the society. R.S.O. 1970,
c. 411, s. 1(1), parts, amended.
(2) If the name by which a religious society has held or holds land
has been or is changed by the society, the change of name does not
affect the title of the religious society to the land. R.S.O. 1970, c.
41 1 , s. 1(3), amended.
Appoint-
ment of
trustees
Change in
number of
trustees
Term of
office of
trustees
Removal of
trustees and
filling
vacancies
6.— (1) At a meeting of a religious society a resolution may be
adopted appointing trustees, providing for their retirement and
removal, and for the appointment of their successors, and conferring
upon them power to acquire, hold and possess land for any of the
purposes of this Act. R.S.O. 1970, c. 411, s. 1(1), parts, amended.
(2) A religious society may at any time by resolution increase or
decrease the number of its trustees appointed for the purpose of this
Act. R.S.O. 1970, c. 41 1, s. 3, amended.
(3) Unless the constitution or a resolution of a religious society
provides otherwise and subject to subsection 4, a trustee holds office
until he dies, resigns or ceases to be a member of the society.
(4) A religious society by resolution adopted at a meeting may,
(a) remove any trustee from office; and
(b) fill any vacancy in the number of the trustees.
Powers of
trustees
where
vacancy
7.— (1) Where a vacancy occurs in the number of the trustees of a
religious society, the remaining trustees then in office have all the
estate in and title to the land of the society and have all the powers
conferred by this Act with respect thereto as were originally vested
in the whole number until the vacancy is filled.
65
(2) A trustee appointed to fill a vacancy together with the trustees Powers of
originally appointed or subsequently appointed and who remain in successor
office have all the estate, title and powers vested in the original
trustees.
(3) Where no trustees of a religious society remain in office, the Vesting of
land to which the society is entitled vests automatically in trustees land in
successor
subsequently appointed by the society and their successors without trustees
the necessity of any conveyance to such trustees.
(4) Where a religious society is entitled to land and the manner of Where
appointing trustees or their successors is not set out in the instru- successor
ment granting or devising the land, it vests automatically in the not pro-
trustees appointed under subsection 1 of section 6 and their succes- vided for
sors to be held in trust for the society without the necessity of any
conveyance to such trustees. New
8.— (1) A copy of a resolution adopted pursuant to this Act shall Keeping of
be signed by the chairman and the secretary of the meeting at which records
it was adopted and shall be entered in the minute book or other
record kept for that purpose.
(2) A copy of a resolution adopted pursuant to this Act, certified Evidence
as being a true copy by an officer of the society is prima facie
evidence of the matters therein stated.
(3) Failure to comply with subsection 1 does not invalidate the Omissions
resolution or anything done pursuant to it.
(4) A copy of a resolution adopted pursuant to this Act, verified Recording
by the affidavit of an officer of the society may be registered in the of resolution
proper land registry office and if any of the land that is the subject
of the resolution is in the land titles system, the resolution shall be
accepted by the land registrar as conclusive proof of the matters and
facts therein stated. New
9. Any instrument affecting land made by or to trustees under this Instruments
Act shall be expressed to be made pursuant to this Act, but failure made Pur"
to do so does not render the instrument void. New ACt
10.— (lj Any letters patent from the Crown, grant, conveyance or Former
devise of land made before this Act comes into force to persons conveyance
described as trustees for a religious society and purporting to be
made to such persons and their successors shall be deemed to have
the same effect as if it had been a conveyance of the land described
therein under this Act. New
(2) Where more than one letters patent from the Crown, grant, Use of
conveyance or devise have been made for the benefit of a religious several
■ / , ,.rr .i • . ■ i names
society under different names, the society may at a meeting by
resolution adopt one of such names or another name as the name in
which its trustees shall hold the land thereafter. New
11.— (1) The trustees of a religious society shall not exercise any of Authoriza-
the powers conferred upon them by this Act until they are author- *ion required
r •'to exercise
of powers
66
Authoriza-
tion in case
of joint
trustees
Power to
enter into
agreements
to purchase
land
Power to
mortgage
land
Power to
release
equity of
redemption
Power to
lease
Power to
agree to
renewal
terms
Method of
ascertaining
rent
Land
becomes
subject to
mortmain
laws
ized to do so by resolution of the society, and the society may
attach such terms or conditions to any such authorization as it
considers expedient.
(2) In the case of joint trustees for two or more religious societies,
such authorization shall be obtained by resolutions adopted by each
religious society for whose benefit land is or is to be held. New
12. The trustees of a religious society may enter into agreements
to purchase land for the benefit of the society for any of the pur-
poses of this Act. New
13.— (1) The trustees of a religious society may secure any debt
contracted for the acquisition of land for the purposes of this Act or
for the improvement thereof, or for the building, repairing, extend-
ing or improving of any buildings thereon, by a mortgage or charge
upon all or any part of the land of the society. R.S.O. 1970, c. 41 1,
s. 4, amended.
(2) If a mortgage or charge upon land held by the trustees of a
religious society for the benefit of the society is in arrears as to
principal or interest or both, they may release, transfer or convey to
the mortgagee or chargee or his assigns the equity of redemption in
the land so mortgaged or charged, or any part thereof, in satisfaction
of the whole or any part of the mortgage debt. New
14.— (1) The trustees of a religious society may lease for one term
of forty years or for more than one term of not more than forty
years in all, any land held by them for the benefit of the society
which is no longer required by it for any of the purposes enumerated
in section 5, at such rent and upon such terms and conditions as
they consider expedient.
(2) In any such lease the trustees,
(a) may, subject to the forty year maximum term or terms
specified in subsection 1, covenant or agree for the
renewal thereof at the expiration of any or every term of
years for a further term or terms at such rent and on
such terms and conditions as may be agreed upon; or
(b) may covenant or agree to pay to the lessee, his heirs,
executors, administrators, successors or assigns a sum
equal to the value of any buildings or other improve-
ments that may at the expiration of any term be on the
demised land.
(3) The method of ascertaining the amount of the rent during any
renewal term or the value of the buildings or other improvements to
be paid at the end of any term may be specified in the original or in
any subsequent lease.
(4) When land has been leased for the forty year maximum term or
terms specified in subsection 1, it shall, at the expiration of the term
or terms become subject to The Mortmain and Charitable Uses Act.
(Note: In the event that the provisions of The Mortmain and Chari-
table Uses Act restricting investment in land by charities are
67
repealed, this subsection should be deleted together with the
forty year restriction described in subsections 1 and 2.)
(5) The trustees may take all such means and proceedings for the Recovery
recovery of rent or arrears of rent and of the demised land that °/r<:ntHand
landlords are entitled by law to take. R.S.O. 1970, c. 411, s. 6,
amended.
(6) A religious society may by resolution give its trustees a general Power to
authorization to lease any land held by them for terms not exceed- e"ter into
ing three years per term and when so authorized the trustees may, ieases
without further authorization, lease such land from time to time for
a term or terms not exceeding three years per term. New
15.— (1) The trustees of a religious society may upon such terms Power
and conditions as the society may by resolution approve sell or to sel1
exchange at any time land held by them if the society has by resolu-
tion determined that the land is no longer necessary for its purposes.
(2) Land that is not leased under section 14 and that is no longer
required for actual occupation for the purposes of a religious
society, as enumerated in section 5, becomes subject to The Mort-
main and Charitable Uses Act.
(Note: In the event that the provisions of The Mortmain and Chari-
table Uses Act restricting investment in land by charities are
repealed, this subsection should be deleted.)
Surplus land
subject to The
Mortmain and
Charitable
Uses Act,
R.S.O. 1970,
c. 280.
(3) Subsection 1 does not affect any special powers or trusts for Special
le contained in any
c. 41 1, s. 7, amended
sale contained in any instrument inconsistent herewith. R.S.O. 1970, P°wers,not
16. The trustees of a religious society out of which a separate
religious society is formed may convey or transfer to the trustees of
such separate society such part of the land held for the benefit of
the first-mentioned religious society as is no longer required by it.
R.S.O. 1970, c. 411, s. 9, amended.
Conveyance
to trustees
of new
religious
society
17. Where a religious society desires to unite with another reli-
gious society, the trustees of either society may convey or transfer
any land held by them to the trustees of the other religious society
or to the trustees of the united religious society. R.S.O. 1970, c.
41 1, s. 10, amended.
Conveyance
where
religious
societies
unite
18.— (1) Each of two or more religious societies may by resolution Joint
appoint joint trustees and provide for the appointment of their trustees
successors and may enter into agreements respecting the holding of
land for their joint benefit by such joint trustees for any of the
purposes enumerated in section 5 and all the provisions of this Act
apply mutatis mutandis to such joint trustees.
(2) Where land referred to in subsection 1 was, prior to the agree- Conveyance
ment held by different bodies of trustees, the religious societies may to Joint
trustees
direct them in the agreement or otherwise to convey or transfer the
land to the joint trustees so appointed and their successors.
68
Conveyance
to denomi-
national
board or
trustees
Application
to court for
directions
where
religious
society has
ceased to
exist
Power of
court to
direct sale
(3) The trustees of a religious society may convey or transfer any
land held by them for the benefit of the society to an incorporated
board or to trustees of the denomination or subdivision thereof of
which the society forms a part. A^ew
19.— (1) Where a religious society has ceased to exist, or where the
authorization required under section 1 1 cannot be obtained for any
reason other than a dispute among the members of the society
concerning the society's property, the persons in whom the land of
the society is vested as trustees or, upon their failure to do so or
where no trustees remain in office, any interested person or the
Public Trustee may apply in a summary way to the Supreme Court
or to the county or district court of the county or district in which
the land or any part thereof is situate for directions, and the court
may authorize the trustees or may appoint and authorize any other
person to exercise any of the powers conferred by this Act.
(2) Upon such an application the court may direct that the land or
any part thereof be disposed of or that it or the proceeds of sale
thereof be distributed in such manner as it considers proper, and the
court may make such vesting orders as are expedient in the circum-
stances. New
Duty to
account
20. The trustees of a religious society selling or leasing land under
the authority of this Act shall once each year on a day specified in
the constitution or by the practice or custom of the society, and
failing such provision on the first Monday in June in each year, have
ready and open for the inspection of the members of the society a
detailed statement showing the rents that accrued during the pre-
ceding year and all sums in their hands for the use and benefit of the
society that were in any manner derived from land under their
control or subject to their management, and also showing the appli-
cation of any portion of the money that has been expended on
behalf of the society. R.S.O. 1970, c. 411, s. 16, amended.
21.— (1) Any society or other organization that wishes to have
determined whether or not it is entitled to acquire, hold and possess
land under this Act may at any time apply in a summary way to the
Supreme Court or to the county or district court of the county or
district in which the land in question or any part thereof is situate,
and the court may determine the matter.
Applications (2) In like manner the Public Trustee may apply to have deter-
to court by mined whether any society or other organization that purports to
Trustee hdld and possess or that intends to acquire, hold and possess land
under this Act is entitled to do so. New
Applications
to court as
to applicabil-
ity of Act
Removal of
proceedings
into
Supreme
Court
22.— (1) Where an application under subsection 1 of section 19 or
subsection 1 or 2 of section 21 is made to a county or district court,
any interested party may, by notice served on the applicant and on
any other interested parties, if any, and filed with proof of service
thereof with the clerk of the county or district court not later than
two days preceding the day of return of the application, require the
proceedings to be removed into the Supreme Court.
69
(2) Upon the filing of the notice and proof of service thereof, the Transmission
clerk of the county or district court shall forthwith transmit the °f Papers to
,. rr- r i o ^ Supreme
papers and proceedings to the proper ottice ot the Supreme Court in Court
the county or district in which the application was made.
(3) When the papers and proceedings are received at the proper Proceedings
office of the Supreme Court, the proceedings are ipso facto removed j? SuPreme
into the Supreme Court.
Reference
to master
(4) Where an application under subsection 1 of section 19 or sub-
section 1 or 2 of section 21 is made in or is removed into the
Supreme Court, the court may refer any question to a master or
other officer for inquiry and report.
(5) An appeal lies to the Divisional Court from any order made Appeal
under this section. New
23.— (1) Notice of an application under subsection 1 of section 19 Notice to
or subsection 1 of section 21 shall be given by the applicant to the £ublltc
Public Trustee.
(2) In any other proceedings in which the application of this Act is Idem
in issue, the court or judge, as the case may be, may direct that
notice be given to the Public Trustee.
This Act
does not
affect special
Acts
24. This Act does not repeal, alter, affect or vary any of the provi-
sions of any special Act with reference to any religious society, but,
on the contrary, any of such provisions that differ from or are
inconsistent with any of the provisions of this Act prevail, and where
any additional rights or privileges are conferred by this Act, they
shall be construed as supplementary to the provisions of any such
special Act, and in every case the special trusts or powers of trustees
in any deed, conveyance or other instrument are not affected or
varied by any of the provisions of this Act. R.S.O. 1970, c. 411, s.
17 , amended.
25. The Religious Institutions Act, being chapter 411 of the Repeal
Revised Statutes of Ontario, 1970, is repealed.
26. Any land transaction that has been authorized and is in the Transitional
process of being completed under the predecessor of this Act when Provisi°ns
this Act comes into force shall be completed under the predecessor
of this Act as if this Act had not been passed.
27. This Act comes into force on the day it receives Royal Assent. Commencement
28. This Act may be cited as The Religious Societies Act, 197
Short
title
APPENDIX B
Explanatory Note
For years the provisions of this Bill have appeared as section 19
of The Religious Institutions Act.
As The Religious Institutions Act is being revised and its scope
broadened (Bill ) it is no longer an appropriate place for the special
provisions of The Anglican Church of Canada.
This Bill keeps alive these old provisions in a separate statute.
BILL 00
197
An Act respecting
The Anglican Church of Canada
Rights
extended to
The Anglican
Church of
Canada
HER MAJESTY, by and with the advice and consent of the Legisla-
tive Assembly of the Province of Ontario, enacts as follows:
l.-(l) All the rights, powers, and privileges, conferred upon any
society by Hie Religious Societies Act, 197 or any predecessor
thereof extend and apply to The Anglican Church of Canada,
formerly or otherwise called The Church of England in Canada, or
the United Church of England and Ireland in Canada, or the United
Church of England and Ireland in Upper Canada, or the Church of
England in Upper Canada.
(2) The parson or other incumbent of the church for the time being Incumbent
and the churchwardens thereof shall, for the purposes of The Reli- ^ cnurch
W/} rQGTl s to
gious Societies Act, 197 be deemed to be trustees within the be trustees
meaning thereof.
(3) In cases within section 16 of the Act passed in the third year of
the reign of Her late Majesty Queen Victoria, chaptered 74, intituled
An Act to make provision for the management of the Temporalities
of the United Church of England and Ireland in this Province, and
for other purposes therein mentioned, the bishop, or parson, rector
or incumbent or any successor or other person in whom the legal
title or estate is vested, by, from or under any of them, shall also be
deemed to be a trustee by whom the like rights and powers of
trustees may be exercised as in the case of such trustees.
(4) In cases of property vested in the bishop of any diocese in trust, Property
not covered by subsection 3, the bishop shall also be deemed to be a Yfstfdin
1111-1 r i rm r. i the bishop
trustee by whom the like powers of trustees under The Religious in trust
Societies Act, 197 may be exercised as in the case of such trustees.
(5) In cases of property vested in the synod of any diocese within
the Act passed in the seventh year of the reign of Her late Majesty
Queen Victoria, chaptered 68, intituled An Act to Incorporate the
Church Societies of the United Church of England and Ireland, in
the Dioceses of Quebec and Toronto, and the Act passed in the
Bishop, etc.,
to be trustees
under 3 V.,
c.74, s. 16
Property
vested in the
synod in
trust within
7 V., c. 68
and 32 V.,
c. 51
[71]
72
thirty-second year of the reign of Her late Majesty Queen Victoria,
chaptered 51, intituled An Act to Incorporate the Synod of the
Diocese of Toronto, and to Unite the Church Society of the Diocese
of Toronto therewith, the synod shall also be deemed to be a trustee
by whom the like rights and powers of trustees under The Religious
Societies Act, 197 may be exercised as in the case of such trustees,
and the powers of the synod under this subsection may be exercised
by and through such boards and committees as the synod may by
by-law appoint for that purpose.
(6) Land shall not be sold or leased, mortgaged or otherwise encum-
bered under the powers conferred by The Religious Societies Act,
197 except with the consent of the vestry of the church or congre-
gation interested therein and of the bishop of the diocese and the
executive committee of the synod of the diocese, and it is hereby
declared that the consent of the vestry given in accordance with the
rules and canons of such church shall be deemed to be the consent
of the congregation, and the execution of the conveyance by the
bishop, coadjutor bishop or a suffragan bishop of the diocese and by
the secretary or secretaries of the synod, or a memorandum of con-
sent endorsed thereon and signed by them, is, in favour of the
grantee, his heirs and assigns, conclusive evidence of the consent of
the bishop and executive committee. R.S.O. 1970, c.411, s. 19,
amended.
Commence- 2. This Act comes into force on the day it receives Royal Assent,
ment
How land
may be
sold or
encumbered,
consent
requisite
Short
Title
3. This Act may be cited as The Anglican Church of Canada Act,
197 .
APPENDIX C
LIST OF PERSONS AND ORGANIZATIONS
FROM WHOM OR ON WHOSE BEHALF SUBMISSIONS OR
ACKNOWLEDGMENTS WERE RECEIVED
Religious Societies
1. Bharat Bhavan Cultural Centre of India, Hindu Temple,
754 Indian Road, Toronto, Ontario.
2. The Anglican Church of Canada, 600 Jarvis Street,
Toronto, Ontario.
3. Incorporated Synod of the Diocese of Toronto (Angli-
can).
4. The Pentecostal Assemblies of Canada.
5. The Foundation Church of the Millennium, 99 Glou-
cester Street, Toronto, Ontario.
6. The Incorporated Synod of the Diocese of Ontario
(Anglican), 110 Collingwood Street, Kingston, Ontario.
7. Congregation Or Shalom, London, Ontario.
8. Toronto Lodge AMORC (The Rosicrucian Order), 831
Broadview Avenue, Toronto.
9. The United Church of Canada.
10. National Spiritual Assembly of the Baha'is of Canada,
7290 Leslie Street, Thornhill, Ontario.
11. The Church of Jesus Christ of Latter-Day Saints,
Toronto Stake, 79 Alpaca Drive, Scarborough, Ontario.
12. The Salvation Army.
13. Second Church of Christ, Scientist, 1015 Danforth
Avenue, Toronto, Ontario.
14. First Church of Christ, Scientist, 4940 Jepson Street,
Niagara Falls, Ontario.
15. Reorganized Church of Jesus Christ of Latter Day
Saints, P.O. Box 1090, Woodbridge, Ontario.
16. The Christian and Missionary Alliance, Canadian Mid-
west District, 2521 Parliament Avenue, Regina, Saskat-
chewan.
17. Christian Science Society, Masonic Temple, 132 Foster
Avenue, Belleville, Ontario.
18. First Church of Christ, Scientist, 1111 Lakeshore High-
way East, Oakville, Ontario.
19. First Church of Christ, Scientist, 216 Mowat Avenue,
Kingston, Ontario.
20. The Baptist Convention of Ontario and Quebec.
21. Catholic Conference of Ontario.
22. The Islamic Movement of Canada.
[73]
74
23. First Church of Christ, Scientist, Kitchener.
24. Canadian Reformed Churches (Regional Synod, Ontario,
1974).
25. Most Rev. T.J. McCarthy, Bishop of St. Catharines
(Roman Catholic).
26. Most Rev. J. A. Plourde, Archbishop of Ottawa (Roman
Catholic).
27. Roman Catholic Episcopal Corporation of Ottawa.
28. Rabbi J. Benjamin Friedberg, Beth Tzedec Congregation,
Toronto.
29. Most Rev. J. L. Wilhelm, Archbishop of Kingston
(Roman Catholic).
30. Church of Scientology of Toronto.
31. Rabbi Yaacov Rone, Congregation Or Shalom. London.
32. Sons of Jacob Congregation Incorporated, Belleville.
33. Temple Beth-El, Windsor
34. Canadian Jewish Congress, Central Region.
35. The Presbyterian Church in Canada.
Other Charities
1 . Bloorview Childrens Hospital.
2. Heritage Canada.
3. The Ontario Association for the Mentally Retarded,
1376 Bayview Avenue, Toronto, Ontario.
4. The Board of Governors, The Ontario Institute for
Studies in Education.
Other Interested Persons and Organizations
1 . John Labatt Limited, London, Ontario.
2. Six Nations "Iroquois" Confederacy, Grand River Coun-
try, Box 912, Caledonia, Ontario.
The Chief Justice and Justices of the Supreme Court of Ontario
1. The Honourable G. A. Gale, The Chief Justice of
Ontario.
2. The Honourable Mr. Justice J. L. Wilson.
3. The Honourable Mr. Justice A. Kelly.
4. The Honourable Mr. Jnastice N. C. Fraser.
5. The Honourable Mr. Justice S.H.S. Hughes.
6. The Honourable Mr. Justice J. H. Osier.
7. The Honourable Mr. Justice P. Wright.
75
5. County Court Judges
1 . His Honour Chief Judge W.E.C. Colter, Toronto.
2. His Honour Judge M. G. Gould, Sault Ste. Marie.
3. His Honour Judge W. B. Beardall, Chatham.
4. His Honour Judge James A. Clare, Barrie.
5. His Honour Judge J. C. Anderson, Belleville.
6. His Honour Judge John A. Pringle, Simcoe.
7. His Honour Judge Douglas C. Thomas, Bracebridge.
8. His Honour Judge L. A. McLennan, Kenora.
9. His Honour Judge I. A. Vannini, Sault Ste. Marie.
10. His Honour Judge B. Barry Shapiro, Brampton.
11. His Honour Judge G. F. Smith, Napanee.
1 2. His Honour Judge Walter Little, Parry Sound.
13. His Honour Judge Alan R. Campbell, Kingston.
14. His Honour Judge Colin S. Lazier, Hamilton.
1 5. His Honour Judge F. Joseph Cornish, Toronto.
6. Legal Profession
1 . A. E. Wheable (Petch Associates), London.
2. Donald W. Milne, Toronto.
3 . J . V. McManamy , Thorold .
4. Peter G. Beattie (McCarthy & McCarthy), Toronto.
5. S. H. Martin (McTaggart, Adams & Martin), Ottawa.
6. S. Lavine (Norman, Lipson & Lavine), Toronto.
DISCUSSIONS AND CORRESPONDENCE
WITH DEPARTMENTS OF GOVERNMENT
1 . The Public Trustee (Mr. F. J. Maher, Q.C.) and members of his
staff.
2. The Executive Director, Companies Division, Ministry of Con-
sumer and Commercial Relations (Mr. C.R.B. Salter, Q.C.) and
members of the staff of the Companies Division.
3. Mr. CM. Powell, Q.C, Assistant Deputy Attorney General;
Crown Law Office.
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